Hanoi to set aside more than $41 million to support SMEs
|Workers at a garment factory in Ha Noi. — Photo baodansinh.vn|
Ha Noi will allocate VND957 billion (more than US$41 million) to assist small and medium-sized enterprises (SMEs) in 2021-25 as part of a supporting programme for SMEs approved by the municipal People’s Committee late last year.
Under the programme, Ha Noi targets to have 150,000 newly-established enterprises in the next four years or an average growth of business creation at 10 per cent annually, equivalent to 30,000 newly-established firms.
In 2021-25, SMEs in Ha Noi are expected to add 1.5 million jobs while making up more than 40 per cent of the city’s gross regional domestic product and 25 per cent of its total export turnover.
Per the programme, Ha Noi also aims to provide support to at least 500 SMEs in the manufacturing and processing sector, especially in IT, industrial electronics, high-tech farming, and agricultural production, among others.
The programme also outlines three main tasks for local authorities, including providing overall assistance to SMEs, supporting business households to formalise into enterprises and helping SMEs integrate into value chains while drafting preferential treatment for enterprises.
Meanwhile, the city will speed up administrative reform and facilitate the application of online public services while creating favourable conditions for local SMEs to enhance their presence in the domestic market.
Last year, Ha Noi saw the establishment of 26,441 new enterprises with a combined registered capital of more than VND337 trillion. The latest addition had brought the number of operating companies in the city up to 303,646.
Nearly 6,300 enterprises resumed operation during the year, up 21 per cent year-on-year.
The city’s local departments and units have so far trimmed 91 administrative procedures in the fields of natural resources and environment.
In another move, the SME Support Centre under Ha Noi’s Department of Planning and Investment has put into operation a portal to support businesses at hotrodoanhnghiep.hanoi.gov.vn.
The portal will introduce the Government as well as the capital city’s policies and programmes to support SMEs.
The portal is an address for individuals, organisations and businesses to find useful information for business activities; seek opportunities to co-operate with partners and promote products to customers; as well as seek technical and capital support from experts and investors.
This will also be the place to receive opinions from enterprises in Ha Noi on issues that need to be solved.
At the same time, it is an online address for sharing knowledge, materials, experiences, corporate governance models as references for small and medium-sized businesses to spread among the business community in the capital city.
In the future, the city vows to continue improving its business environment, sharpening its competitiveness while ensuring a fair and transparent environment for all enterprises.
Vietnam moves towards cashless society
Nearly 50% of Vietnamese customers are using contactless payment, and 51% have e-wallet accounts.
Vietnam is on the way to create a cashless society as more people are turning to e-payment instead of traditional payment methods.
A recent survey from payment services provider VISA revealed in 2020, 47% of Vietnamese customers turned to contactless payment, 45% used online payment and 51% have e-wallet accounts.
“Such trend is similar to other countries in the Asia-Pacific region, which is also the reason for Visa to announce the startups acceleration program for the region, including Vietnam,” said Director of Visa in Vietnam and Laos Dang Tuyen Dung.
“The program will offer opportunities for startups to join digital economy, in which they are provided with the required knowledge to help them further develop,” noted Ms. Dung.
Given Visa’s large network of customers and partners, the program is expected to help propel Vietnamese companies with high potential to gain foothold in regional markets, stated Ms. Dung.
Visa President in Asia-Pacific Chris Clark said from the company’s experience, startups are facing certain difficulties when expanding their operation abroad.
In the first year of the program, Visa will select six potential startups to support, added Mr. Clark.
Meanwhile, the program also helps customers and enterprises overcome difficulties from the Covid-19 through the application of technologies, in turn promoting cashless payment.
In the 2016-18 period, startups in Vietnam received nearly US$900 million in funding, nearly triple the amount recorded in previous periods.
Vietnam is also the top destination in the Southeast Asia in terms of attracting investment into new payment methods, accounting for 36% of total funding into this field in 2019 in the region.
Early positive signs for Vietnam stock market in 2021
It is not a coincidence that a strong economic growth period happened when the local stock market was setting new records.
While setting up multiple records in 2020, Vietnam’s stock market is further destined to have a bright outlook with some early positive signs right from the early year.
Vietnam’s GDP in the fourth quarter of 2020 increased by 4.48% year-on-year, the highest quarterly growth of the year, and ultimately led to an overall economic expansion of 2.91%. This was the lowest in a decade but among the world’s highest.
It is not a coincidence that a strong economic growth period happened when the local stock market was setting new records.
Since the benchmark Vn-Index fell to its rock-bottom in March 2020 with a 25% slump, the stock market has been on the steady rise and ended the last trading session of the year at 1,103.87, representing an increase of 14.9% against early 2020 and 67% compared to its lowest point. This was around 9% below its all-time high at 1,204 reached in April 2018.
The impact of stock market does not limit to economic growth with a high amount of capital mobilization pumped into the economy, but the most important point is a positive sentiment that the stock market builds among investors, producers and businesses.
Since the first trading session of the year on January 4, the stock market continues to pick up the momentum and is on track to reach 1,200 points this week.
The market has reason to stay positive given the Vietnamese Government setting sight on a GDP growth target of 6.5% for this year, a 0.5 percentage points higher than the target set by the National Assembly.
In the Government’s Resolution No.01/NQ-CP released on the first working day of 2021, the Government gives priority to accelerating the privatization of State-owned enterprises and urges firms to list shares on the stock market after having completed the process, a key move to diversify investment products and further attract investment capital into the stock market.
Vietnamese investors have opened 270,400 new accounts to invest in equities during the first 11 months of 2020, bringing the total to 2.7 million, and about 300,000 more accounts are expected to be opened this year.
The 41,200 new accounts opened in November was the highest monthly figure ever. Of this total, 123 accounts were opened for local institutions and the rest for retail investors.
In 2020, the amount of capital poured into Vietnam stock market surged 20% 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.
Such strong growth led to the total market capitalization on Vietnam’s stock market accounting for an all-time high of 84.3% of the GDP, while nearly 84% of public firms have generated profit, which is a high rate amid the Covid-19 pandemic.
“Vietnam’s stock market could be included among the world’s best performing in terms of resilience and recovery capability,” said Minister of Finance Dinh Tien Dung at the opening of the first trading session on January 4.
Second COVID-19 wave hits Thailand’s air travel industry
Domestic air travel in Thailand has dropped by 60 percent since the start of 2020 due to the recent COVID-19 outbreak, said the Department of Airports of Thailand (DoA).
DoA Acting Director General Apirat Chaiwongnoi said the number of domestic passengers passing through the country’s 20 airports plunged from an average 30,000 a day before the New Year to 12,000, adding that the number of aircraft in the sky also fell.
Executive Vice President of the Aeronautical Radio of Thailand (ART) Tinnagorn Choowong said in Thailand, both domestic and international fights last year dropped 55 percent to 464,944, from 1.04 million in 2019.
From January-November 2020, foreign arrivals in Thailand slumped by 81 percent annually to around 6.7 million, compared to nearly 40 million in the previous year.
The Thai Government has designated 28 cities and provinces, including Bangkok, as “highly controlled areas,” while five provinces hit the hardest by re-emerging COVID-19, namely Samut Sakhon, Rayong, Chon Buri, Chanthaburi and Trat, are put under maximum control./.
Cambodia temporarily bans import of farmed fish
Cambodia has temporarily banned all imports of farmed fish from neighbouring countries in efforts to promote locally farmed fish, according to the Ministry of Agriculture, Forestry, and Fisheries (MAFF).
The Khmer Times reported that the temporary ban followed a meeting held at the ministry on January 8 together with representatives of the Cambodian Aquaculture Association, fish vendors, importers, and exporters.
The MAFF imposed the ban following requests by farmed fish breeders who said they are badly affected by the market being flooded with smuggled farmed fish from neighbouring countries, which has led to a drop in prices for the domestically farmed fish.
The ministry said in a statement that farmed fish, especially catfish, giant snakehead fish and other farmed fish that can be locally bred, are now temporarily banned from being imported from neighbouring countries till further notice.
It has also asked the Cambodian Aquaculture Association to collect in-depth data on the monthly total production of farmed fish, the types of fish supplied to the local market, and the monthly consumption figures.
The MAFF said it can get local vendors to buy locally produced farmed fish to supply for traders in the market.
Importers and exporters of farmed fish have also agreed to the ministry’s decision, the Khmer Times noted.
During his visit to a fish farming site last week, Agriculture Minister Veng Sakhon said that fish production had increased notably following the government’s call for more local food production to meet domestic demand which will in turn reduce imports of farmed fish.
Sok Raden, President of the Cambodian Aquaculture Association, said the organisation has 200 fish farmers who are capable and have the capacity to produce enough farmed fish to meet domestic demand.
MAFF figures showed that the production of farmed fish reached 400,000 tonnes last year, while fish caught from natural lakes and the sea were 413,200 tonnes and 122,700 tonnes, respectively./.
Doosan Vina exports raw fuel heating equipment to Thailand
The Doosan Heavy Industries Vietnam Company (Doosan Vina) on January 11 exported 2,195 tonnes of raw fuel heating equipment to Thailand under a project it had signed with JNK Heaters of the Republic of Korea (RoK).
The shipment comprised module radiant, convection, stack, heater duct, air pre-heater duct, platform and other products.
The TOP Fired Heater project was inked by the two sides in September 2019, aiming to supply 3,772 tonnes of equipment of fired heaters to Sriracha refinery in Thailand’s Chonburi province.
This is the second out of the four shipments as part of the project, after the first on January 20, 2020. The remainders are expected to be delivered in February 2021.
Last year, Doosan Vina conducted 1,004 shipments with more than 52,000 tonnes of equipment to nine countries around the world./.
Vietnam prepares best conditions to spur economic growth: forum
Vietnam has prepared the best conditions to spur its economic growth as the global economy is grappling with the severe impacts of the COVID-19 pandemic, experts have said.
At the Vietnam Economic Scenario Forum in Ho Chi Minh City on January 11, the experts said Vietnam has mapped out a socio-economic development strategy for 2021-2025. Vietnam aims to become a developing country with a modernity-oriented industry by 2025 and a developing nation with a modern industry and high middle income five years later.
Tran Hong Quang, Director of the Vietnam Institute for Development Strategies under the Ministry of Planning and Investment, said the country’s GDP growth rate is projected at about 7 percent annually in the 2021-2030 period. Its GDP per capita is set at 4,700-5,000 USD in 2025, and around 7,500 USD in 2030, he added.
To that end, Vietnam should boost key economic sectors that would serve as the driver of the national economy, and complete the restructuring of State-owned enterprises, he suggested.
The country needs to swiftly complete the infrastructure system, particularly in transport, energy, IT, major urban areas, and climate change response, according to Quang.
Other experts suggested enhancing the private economic sector in terms of volume, quality, efficiency and sustainability, making them become an engine of the national economy.
Some said the selection of foreign investments would help Vietnam attract projects with high technologies, modern governance and connected with the global supply chains.
Nguyen Xuan Thanh, a member of the Prime Minister’s Economic Advisory Group, held that the national economy will be driven by the domestic market, private investments and exports to the EU and ASEAN this year.
Pham Thanh Ha, Director of the State Bank of Vietnam (SBV)’s Monetary Policy Department, said the central bank will continue to manage the monetary policy proactively and flexibly.
Andy Ho, Managing Director and Chief Investment Officer of VinaCapital, said Vietnam’s enhanced prestige in the international arena has helped to lure foreign investment to the country.
State capital management commission completes tasks for 2020
The Commission for the Management of State Capital at Enterprises (CMSC) has completed the settlement of 233 out of 259 cases transferred from ministries, including 44 handled in 2020, heard a conference in Hanoi on January 11.
Throughout 2020, the commission submitted proposals to the Prime Minister on the restructuring and adjustment of charter capital of many enterprises, while reporting the situation of inefficient enterprises as well as giving solutions.
Amid the COVID-19 pandemic’s impacts, it showed strong performance in leading the State-owned sector in the moment with various challenges.
With the efforts to realise the twin targets of preventing COVID-19 pandemic and boosting socio-economic development at the same time, Stated-owned economic groups and corporations completed all tasks and plans set for the year.
Total revenue of 19 Stated-owned enterprises reached over 767 trillion VND (33.26 billion USD), equivalent to 87.36 percent of the yearly target and 85.72 percent of the result in 2019. Their pre-tax profit was estimated at over 21 trillion VND, while the State budget payment of 17 out of the 19 enterprises hit over 56 trillion VND, equivalent to 112 percent of the goal for 2020 and 79.3 percent compared to that in 2019.
Addressing the conference, Permanent Deputy Prime Minister Truong Hoa Binh hailed the achievements that the commission has made.
He noted that the commission, which was formed three years ago and has become operational for nearly two years, has overcome difficulties to complete all assigned tasks, maintaining and expanding the State capital in enterprises, hence making important contributions to the country’s socio-economic development.
He suggested the commission enhance its management efficiency, while improving transparency and accountability, thus not allowing losses and wastefulness of State capital and property.
At the same time, it should show stronger performance as the capital ownership representative at 19 groups and corporations, aiming to develop the State capital at enterprises, he said.
The commission needs to build specific criteria and indications assessing the efficiency of enterprises, while strengthening the application of technological advances in supervising businesses’ operations, stated the Deputy PM.
He stressed that the restructuring and renovation as well as the equitisation of State-owned enterprises should be sped up with higher quality, along with the digitalisation of businesses amidst the fourth Industrial Revolution.
Meanwhile, it is necessary for the commission to focus on detecting projects and enterprises suffering losses and inefficient operations, thus avoiding capital losses.
On the occasion, four members of the commission were honoured with the Labour Order, third class, while seven others received certificates of merit from the Prime Minister in recognition of their outstanding performance and contributions to the national construction an defence./.
HCM City seeks ways to bolster credit growth
Ho Chi Minh City’s credit growth amounted to some 2.4 quadrillion VND (104 billion USD) as of the end of 2020, making up nearly 27 percent of the country’s total.
The figure represented a year-on-year increase of just 9 percent, lower than the national average of 12.13 percent.
The city posted growth of 1.39 percent in gross regional domestic product (GRDP) from 2019, equal to half of Vietnam’s GDP growth of 2.91 percent.
Deputy Director of the State Bank of Vietnam (SBV)’s HCM City Branch, Nguyen Hoang Minh, explained that capital attraction by local businesses was down compared to the previous years due to the COVID-19 pandemic.
The pandemic being brought under control contributed to the country’s economic recovery and improvement in credit growth by the year-end, he noted, adding that the banking sector provided sufficient capital for local businesses to operate.
When COVID-19 broke out, the SBV and commercial banks in HCM City cut interest rates and promptly implemented Circular No. 01 on supporting affected businesses through debt restructuring and exemptions on interest payments and service charges, among others.
To enhance businesses’ access to capital, the HCM City branch of the central bank has joined hands with the Department of Industry and Trade and the HCM City Union of Business Associations (HUBA) to promote a programme connecting banks with enterprises and businesses, enabling the latter to obtain loans at low interest rates.
At a recent press conference on the tasks for the banking sector this year, SBV Deputy Governor Dao Minh Tu affirmed that support for enterprises to surmount the difficulties posed by COVID-19 is among the most important tasks this year, given the pandemic is still wreaking havoc on many countries worldwide./.
Vietnam Railways Corporation hard hit by COVID-19
The Vietnam Railways Corporation (VNR) has lost 1.32 trillion VND (some 56.8 million USD) in revenues due to the COVID-19 pandemic and flooding in the central region.
Speaking at a conference held recently to discuss the railways’ plans for this year, VNR Chairman Vu Anh Minh said revenues last year were down 21.7 percent to 6.56 trillion VND (284.5 million USD).
The continuing pandemic threatened another difficult year for the railways, he said, adding that it also faced severe competition from low-cost airlines.
Work to upgrade the Hanoi- Ho Chi Minh City route at a cost of 7trillion VND (303.6 million USD) reduced its capacity by 25-30 percent during the construction period, he said.
The company had not received enough funds for developing basic infrastructure, making it difficult to attract private investors, he said.
Its market share had significantly fallen, while the number of passengers in some months last year plunged to record lows, he said.
If business does not improve this year, the company foresees a loss of 3.25 trillion VND (140.9 million USD) for its two subsidiaries, Hanoi Railway Transport and Sai Gon Railway Transport, in the next two years, according to Minh.
It expects the performance to start recovering once COVID vaccines are rolled out across the world and the pandemic is under control.
Minh also hoped a plan to restructure VNR would be approved soon so that the firm can restructure its finances, investments, human resources and organisation and invest more in technology and services.
At the conference, Deputy Minister of Transport Nguyen Ngoc Dong admitted that the railway sector experienced a tough year.
Over the past decade, the sector failed to mobilise resources for its development. Meanwhile, the investment in the sector had increased slightly by 4-4.5 trillion VND, mainly for infrastructure maintenance and social welfare and not for development.
Dong also said it would be difficult to eliminate the difficulties facing the sector in a short time./.
Ha Nam province’s industrial production up 19 percent in 2020
Industrial production in the northern province of Ha Nam totalled 110.69 trillion VND (nearly 4.78 billion USD) last year, a 19 percent increase against 2019 and 5 percent higher than the annual plan, despite the impact of the COVID-19 pandemic.
Local enterprises at industrial parks were battered by disruptions in global supply chains and difficulties in exporting goods caused by the pandemic as well as the increasing cost of the response. Production still grew, however, thanks to the efforts of the local business community and timely support from authorities.
Significant growth was posted in the production of tiles (12.5 percent), the production of rubber products (10 percent), and the manufacturing of electronic parts (6 percent).
The province exported approximately 2.77 billion USD worth of goods during the year, up 15 percent against 2019 and 6 percent higher than the annual plan. State budget revenues rose 12.3 percent year-on-year to 4.27 trillion VND.
Ha Nam now has eight industrial parks covering a total area of 2,043 ha. Seven have basically completed infrastructure development. Occupancy stands at around 74.4 percent, with about 372 ha of land looking for tenants.
The province was named among the top 10 cities and provinces with the highest registered FDI last year, with 702.5 million USD injected into local industrial parks, said Tran Van Kien, director of the management authority of Ha Nam’s industrial parks. Over 2.6 trillion VND worth of domestic investment also landed at industrial parks.
Of the province’s 45 newly-registered projects in 2020, 11 were in manufacturing, five in processing, and 22 in support industries.
Ha Nam is now home to 459 valid projects, including 284 FDI projects with total registered capital of over 3.88 billion USD and 175 domestic projects with more than 32.1 trillion VND./.
Austal CEO: Australian firms see great chance to do successful business in Vietnam
Australian businesses will have a great chance to be successful with their business in Vietnam once they embrace and respect the local culture, treat Vietnamese workforce with respect, and speak a little slower than they do at home, said Austal CEO Patrick Gregg.
In a recent interview granted to the Vietnam News Agency correspondent in Sydney on the shipbuilding group’s business in Vietnam and the country’s business environment, he said “My suggestion to any Australian business considering setting up in Vietnam would be to do their homework well, reach out to the relevant provincial People’s Committee for support as well as Auscham Vietnam and the Department of Foreign Affairs and Trade (DFAT) of Australia”.
They should start with a small but skilled expat base, preferably experienced with Vietnamese or Asian cultures and surround them with a key Vietnamese management team that have solid English language skills, both written and spoken, and are well versed in the legislative requirements applicable to their area of expertise, he noted.
He also praised Vietnamese workers, saying they are very conscious in regards to safety and environmental issues but practises do vary widely across industries, and are capable of working to very high standards.
Regarding Austal Vietnam’s operation during the hard year of 2020, Patrick Gregg said while some countries have been affected by COVID-19 worse than others, in Vietnam, the company enjoyed a relatively uninterrupted year due to solid Government policy and a disciplined and supportive response from the Vietnamese population.
However, it still encountered some problems as a result of travel restrictions and lack of flight availability once travel restrictions eased, he noted.
About Austal’s plan to develop business in Vietnam after the signing of an MOU between Western Australia and Ba Ria – Vung Tau province, the CEO said that the MoU signing is another significant step forward in Australian Vietnamese relations and while COVID-19 has dampened global markets across all sectors.
“We look forward to a resurgence of business activity in mid to late 2021. In this circumstance we are very hopeful that with the continued support of the Ba Ria Vung Tau People’s Committee, we will be well placed to capitalise on any opportunities that may arise,” according to him.
Currently Austal Vietnam has 323 staff at its facility in Dong Xuyen Port of Vung Tau, which is slightly up from the figure of 318 employed in October 2019. During its first two years of operation, it has provided intern opportunities for 24 naval architects from the University of Transportation and Communication – Ho Chi Minh City, Da Nang University of Technology, Ba Ria-Vung Tau University, Ho Chi Minh City University of Technology, and Nha Trang University.
In addition, it has also provided shipbuilding training opportunities for 46 trainees./.
Bank offers soft loans to businesses for paying COVID-19-impacted workers
The Vietnam Bank for Social Policies (VBSP) has allocated 31.6 billion VND (1.36 million USD) to 207 enterprises to pay wages for 8,529 labourers who lost jobs due to impact of the COVID-19 pandemic.
According to the bank, it has extended payment dates and adjusted the lending terms for 242,700 existing customers, while giving more loans to 122,900 others with total capital of over 3.11 trillion VND.
At the same time, it has provided loans for nearly 2 million new customers with a total capital of over 71.58 trillion VND.
In 2020, amid the complicated developments of the COVID-19 pandemic, the bank offered support to affected businesses and people while ensuring its continuous operations.
The VBSP coordinated with other relevant agencies to build and submit resolutions and decisions to the Government and Prime Minister on the implementation of support policies to those who face difficulties due to COVID-19. The documents have served as important foundations for the lending to employers with loans to pay wage for affected labourers.
Accordingly, the eligible employers are those whose employees are joining compulsory social insurance and had to stop their jobs at least one month continuously between April to the end of December 2020, while suffering from a 20 percent year-on-year drop in their revenue in the first quarter of 2020, and having no bad debts.
They will get loans with the value equivalent to a half of the total wage they have to pay to their employees on the basis of the minimum regional wage, with zero percent interest rate in 12 months.
The capital of the scheme will be disbursed until January 31, 2021, according to the bank./.
Global foothold the target for Binh Phuoc cashew nuts
The southern province of Binh Phuoc, dubbed Vietnam’s “cashew capital”, is working towards boosting the popularity of its cashew nuts among global consumers, especially in demanding markets such as the US and the EU.
About 170,000 ha of cashew are being grown in the province, mostly in the districts of Phu Rieng, Bu Gia Map, Bu Dang, and Dong Phu, which generate 243,000 tonnes each year, according to the provincial Department of Agriculture and Rural Development.
The Agro Processing and Market Development Authority at the Ministry of Agriculture and Rural Development said quality and taste are strengths of Vietnamese cashew nuts compared to foreign competitors, and those from Binh Phuoc are rich in nutrition and of superior quality.
Huynh The Du from Fulbright University Vietnam said the province is struggling to build its own cashew nut brand, as local producers continue to import low-quality raw cashew nuts from Africa and Cambodia for export processing.
Imported raw materials account for 70 percent of cashew processing, he said, voicing concerns about the limited capacity of small-scale production facilities, which has affected product quality.
Du underlined the need to improve the added-value of production chains through attracting investment in intensive processing, boosting mass production, and identifying mechanisms to facilitate stronger ties between businesses and farmers.
Nguyen Van Hieu, Deputy Director of the provincial Department of Industry and Trade, said Vietnam’s cashew nut exports now fetch around 3.5 billion USD, making it the top foreign currency earner among agricultural products.
The country needs more than 1 million tonnes of raw cashew nuts for processing every year. As only some 300,000 tonnes are sourced domestically, the remainder must be imported, with most coming from West Africa.
He noted that, in late December, the Binh Phuoc People’s Committee granted an investment certificate to a Dutch enterprise investing in cashew nut value chain.
Mekong Corporation Europe BV (MCE) from the Netherlands and Vietnam’s An Viet Phat Energy Co. Ltd will invest some 250 million USD in the endeavour.
They will develop a cashew nut growing zone of 200,000 ha, a cashew nut production plant with a capacity of 168,750 tonnes per year, a cashew nut shell oil factory producing 118,125 tonnes per year, and another turning out products from cashew nut shell residue.
They are also set to build a cashew nut research institute in Bu Dang district’s Duc Lieu commune.
MCE Director General Nguyen Thanh Tan said the cashew nut value chain in Binh Phuoc will be developed in accordance with European standards, and all products will be exported to Europe.
He expressed his confidence that with its experience and capacity, the company will successfully develop a brand for Binh Phuoc cashew nuts in the global market./.
Domestic cement sales forecast to increase but export to slow down
The cement industry is forecast to see a significant increase in domestic sales in 2021, driven by investment in infrastructure, foreign direct investment inflow and the recovery of the real estate market. However, exports are set to slow down.
According to a recent report by SSI Research, domestic cement demand is expected to increase around 5-7 percent this year compared to 2020. The increase in domestic sales will be fuelled by the increase in infrastructure investment, foreign direct investment inflow into the country and the recovery of the real estate market, which will push up demand for cement, SSI Research said.
Cement exports are expected to be stable as import demand of China remains high amid infrastructure investment, however, it would be difficult to see strong growth like 2020 because China’s cement supply is gradually recovering.
Overall, total sales of cement and clinker are forecast to increase by about 2 percent this year.
SSI Research estimated that total production capacity of the cement industry would increase by 7 million tonnes, or 7 percent, due to new production lines that became operational at the end of 2020 and at the beginning of this year. Competition will also increase in the domestic market, boosting cement prices.
SSI Research also pointed out that heavy dependence on cement exports to the Chinese market remained a worry, especially as China could tighten its fiscal policies in the future. China accounted for 57 percent of Vietnam’s cement and clinker export and 22 percent of the country’s total cement and clinker sales last year.
Total sales of cement and clinker were estimated at 101.5 million tonnes last year, representing a rise of 1.5 percent over 2019.
According to the Vietnam Cement Association, due to the impacts of the COVID-19 pandemic, domestic sales of cement fell 5 percent to 56.1 million tonnes in January – November as construction activities were sluggish, especially in the first four months of this year when social distancing was imposed. In January-April, cement sales decreased by 10 percent from the same period last year.
However, domestic cement sales saw significant increases in May – November as the construction and investment in infrastructure was sped up.
The Government focused on speeding up the disbursement of public investment to drive economic growth in the pandemic, which accelerated investment in infrastructure development.
The cement export increased strongly in the first 11 months of last year, by 15 percent over the same period, driven by exports to China which saw a rise of 102 percent in volume./.
Two more Vietnamese dairy producers licensed to export to China
Two more Vietnamese dairy producers have been granted with transaction codes for exporting their products to China by the Chinese General Administration of Customs, said the Ministry of Industry and Trade’s Asia-Africa Market Department on January 11.
Accordingly, Binh Duong Nutifood Nutrition Food JSC is now permitted to export sterilized milk, modified milk and flavored fermented milk products to China.
Meanwhile, Truong Tho Dairy Factory, a member of Vietnam’s largest dairy company Vinamilk, is licensed to ship to the neighbouring country sterilized milk, modified milk, sweetened condensed milk and other condensed milk products.
So far, China has granted transaction codes to seven Vietnamese dairy companies and factories, including TH True Milk, Hanoimilk, Bel Vietnam, Nutifood, and three Vinamilk factories.
China is the biggest milk importer in the world. In 2019, the country imported 39.43 million tonnes of milk and milk products. Of which, imported fresh milk was about 750,000 tonnes and milk powder was 650,000 tonnes.
The United Nations Food and Agriculture Organisation predicted that the demand for milk and milk products of this market would increase around 45 percent by 2025./.
US announces preliminary determination on Vietnamese passenger vehicle tyres
Some Vietnamese exporters of tyres have been hit with a 22.3 per cent anti-dumping duty in the US, according to the Ministry of Industry and Trade.
The US Department of Commerce (DOC) recently announced preliminary determinations in the anti-dumping investigations of passenger vehicle tyres from certain countries, including Viet Nam.
The ministry said the determination was a positive result as the other exporters not subject to anti-dumping duties account for more than 95.5 per cent of Vietnamese tyre exports to the US.
Those that were hit with a 22.3 per cent anti-dumping duty had not shown co-operation with the investigation agency, the ministry said.
The result would benefit Vietnamese exporters as their counterparts have to suffer from high rates in the US’s preliminary determinations, from 13.25 to 98.44 per cent, it added.
The US side has asked the firms to provide more information for assessments before the department announces its final determinations in these cases on or about May 14.
The Trade Remedy Authority of Viet Nam, therefore, urged tyre producers and exporters to continue their close co-ordination with the investigation agency.
State Reserves to award ratings to contractors
For the first time, contractors who signed deals with the General Department of State Reserves will be rated using a credit system reflecting their ability and commitment to deliver on contracts, according to the head of the general department’s legal office Nguyen Van Binh.
Contractors, based on their rating, will be divided into four groups with Group 1 and 2 the most credible and reliable and Group 3 and 4 including those who won bids and contracts with the general department but failed to deliver or delivered goods and services that did not meet the agreed-upon quality requirements.
Contractors with low ratings will face greater scrutiny in their bids for contracts, according to Binh.
For the time being, the general department said it will only award ratings to contractors who look to supply the State’s rice reserve but soon the system will cover more commodities.
The general department also said it had made numerous recommendations to improve the current Law on Bidding to hold contractors to greater accountability for all commodities under its management.
This move is in response to a series of incidents earlier this year, in which contractors won bids by the general department to supply rice to the State Reserves but later declined to sign contracts as rice prices surged due to the COVID-19 pandemic. Instead, they opted to export the rice for greater profit.
The general department said contractors who refused to sign contracts after winning bids stand to lose their deposits while those who failed to deliver faced fines of up to 8 per cent of the contract’s value and a 3-5 year ban from bidding under regulations set by the Law on Bidding.
Asked if face masks will be included as a commodity in the State Reserves, Binh said the general department and the Ministry of Health have turned in their proposals, which are under review by the central Government with a decision expected in the first quarter of 2021.
Viet Nam Rubber Group to expand tyre, tube production to prop up revenues
Despite the difficulties caused by the COVID-19 pandemic and natural disasters that directly affected it, the Viet Nam Rubber Group achieved its revenue and profit targets for 2020.
It reported after-tax profit of VND5 trillion on sales of VND25.477 trillion (US$1billion).
But with COVID-19 still a threat, it expects 2021 to be a difficult year.
It has advised its subsidiaries to not stockpile to wait for prices to rise or sell too soon if prices fall.
They should work closely together with respect to processing to control quality and make their products consistent.
It would focus on restructuring and step up investment in the rubber sector, and M&As would help close the rubber tyre and tube products value chain, it said.
Currently it has five main lines of interest: growing rubber trees and processing latex, processing rubber wood, making industrial products from rubber, operating industrial parks amid rubber plantations, and high-tech agriculture.
In the natural rubber segment, GVR manages more than 400,000ha of land under rubber trees, but this business has been on a downward trend in recent years due to low rubber prices.
The COVID-19 pandemic has further hurt demand for rubber, pushing production even lower.
Expanding tyre and tube production could help revive revenues.
It entered this segment in 2017 through a partnership with the Southern Rubber Industry Joint Stock Company (Casumina) to produce the VRG brand of tyres.
Cement exports unlikely to enjoy robust growth in 2021
Vietnam’s cement export volume in the year ahead will remain stable, although export growth is not projected to see vigorous growth similar to 2020 as a result of the Chinese market enjoying a gradual stable supply, according to insiders.
While domestic demand for cement in 2021 is forecast to increase due to increased public investment, the export segment is largely anticipated to enjoy no breakthrough due to low demand from importing countries.
With regard to growth prospects for the local cement industry ahead in 2021 as provided by SSI Research, the demand for cement consumption amid the domestic market is anticipated to reach a growth rate of between 5% and 7%.
This increase in consumption demand can largely be attributed to investment in infrastructure and FDI inflows into the country, in addition to the recovery of real estate construction through major infrastructure projects being implemented, including the North-South expressway project and the Long Thanh airport project.
According to figures released by the Vietnam Cement Association, despite recording a low growth rate in the local market due to the impact of the novel coronavirus (COVID-19) pandemic during 2020, the Vietnamese cement industry enjoyed robust growth in terms of export volume during the 11-month period with an annual increase of 15%.
Most notably, the strongest growth period was recorded between May and September, with a rate of 47% compared to the period from 2019, largely due to increasing demand from the Chinese market.
A representative of SSI believes that although the sector will not achieve robust growth like in 2020, the total consumption of cement and clinker will rise by approximately 2% in 2021.
Despite achieving strong growth, the cement industry has revealed a number of inadequacies that exist, including a heavy reliance on the Chinese market and the limited production capacity of cement plants, experts noted.
Despite Vietnam is the world’s fifth largest manufacturer and largest one in Southeast Asia, the country’s production capacity per factory is less than half of factories from neighbouring countries such as Thailand and Indonesia, with only 2.1 million tonnes produced annually per factory.
Industry experts therefore emphasized the need to ramp up the production capacity of local cement plants to between five and 10 million tonnes per year in a bid to ensure effectiveness in the long term whilst simultaneously reducing costs moving forward. VOV
Vietnam to launch competitive retail electricity market in 2023
Vietnam Electricity will conduct price marketization to encourage investment in electricity industry and follow the State-regulated market mechanism.
Vietnam will officially run the competitive retail electricity market in 2023 as part of efforts to make the power sector more transparent and effective in comparison with the regional peers.
|Deputy Prime Minister Trinh Dinh Dung at the meeting on January 12. Photo: VGP|
Vietnam Electricity (EVN), the country’s sole power distributor, needs to facilitate the investment in infrastructure of the power industry to better connect power plants with the national grid, Deputy Prime Minister Trinh Dinh Dung said at a meeting on January 12.
EVN needs to prioritize energy efficiency together with reasonable import and export of power in national programs, Mr. Dung said, adding that the group should be active in recommending plans for electricity generation and transmission to ensure sufficient energy for socio-economic development, defense and security.
The solutions will aim to keep electricity prices stable. “High power prices will make Vietnamese goods uncompetitive,” the deputy PM said.
Competitive retail electricity market
Vietnam’s 2004 Electricity Law has provided the framework to develop a competitive power market, helping promote private investment, and establish a regulatory authority, according to the World Bank.
Under which, the private sector is encouraged to participate in each distribution company.
Whereas the power market is partially competitive, improved operational efficiency and financial performance of generators in this market has contributed to keeping generation costs relatively low.
Plans are broadly on track for further extensive reforms, including a clean energy transition, Alan David Lee and Franz Gerner said in “Learning from Power Sector Reform Experiences” policy research working paper published in March 2020.
Vietnam has seen significant changes to its market structure, gradually moving from a vertically integrated structure to a more competitive power market, the paper showed.
In less than two decades, the country’s power sector evolved from fragmented companies with high technical and financial losses to an integrated power system, and then to an unbundled group of stated-owned corporations with sizeable participation of domestic and international private sector actors in power generation.
|Vietnam expects to run competitive retail electricity market by 2023. Photo: monre.gov.vn|
Representatives of EVN said at the meeting that one of the group’s tasks for 2021 is to conduct price marketization to encourage investment in electricity industry and follow the State-regulated market mechanism.
Duong Quang Thanh, chairman of the Board of Directors at EVN, said the group will prioritize sufficient power supply in a stable manner in 2021 for the socio-economic targets.
EVN targets to increase output by 5.16% on-year to more than 228 billion kWh in 2021, System Average Interruption Duration Index (SAIDI) of less than 349 minutes, electricity loss rate less that 6.35%.
The group will boost the development of renewable energy to reduce imported materials and ensure stable supply.
In addition, it requires efforts to complete regulatory framework for the electricity industry, especially regulations on credit guarantee schemes as the sector needs huge amount of money for power generation and transmission.
Requirements on environmental protection become strict, demanding investors to develop clean energy sources.
Accordingly, applying advanced technology and using updated equipment will be a must in upcoming power projects.
“The last but not least is digital transformation that should be applied for the group’s operations and customer services to save cost,” EVN’s Deputy General Director Nguyen Tai Anh said at the meeting.
Currently, the group is running 16 software programs including ERP, CMIS 3.0, IMIS, PMIS, HRMS, E-OFFICE and EVNHES, for all its members.
EVN said one of its achievements in 2020 is lowering electricity loss rate to 6.42%, the third in ASEAN.
In 2020, the group offered electricity price reduction worth VND12.3 trillion (US$525 million) to customers as part of efforts to support them in the Covid-19 pandemic.
EVN’s members have so far operated a network of 29,638 megawatts (MW), accounting for roughly 43% of the national installed capacity.
In the year, the consumed power volume reached 216.95 billion kWh, up 3.42% on-year. Hanoitimes
Vietnam Airlines receives multimillion-dollar bailout package as state investment
State Capital Investment Corporation (SCIC), the investment arm of the Vietnamese government, is looking to funnel VND8 trillion (US$347 million) into the charter capital of the flagship air carrier Vietnam Airlines.
On Thursday, Nguyen Chi Thanh, CEO of SCIC, revealed that the state-owned company is working with Vietnam Airlines to settle the share prices for the airline’s incoming offerings.
As per the government’s Resolution 194 on the bailout for Vietnam Airlines in light of the COVID-19 crisis, the air carrier is allowed to offer more shares to existing shareholders to increase its charter capital. The government has assigned the SCIC to buy shares of Vietnam Airlines.
While Vietnam Airlines is devising the plan to increase its capital via share offering before submitting it for appraisal of the State Securities Committee, SCIC is working to set an offering price that matches the market evaluation, Thanh said.
According to the SCIC leader, in order to set a proper price, Vietnam Airlines must figure out its corporate value, which in turn requires a business plan for no less than five years.
However, the business has yet to provide a long-term business plan as its future are still kept in limbo, with the date for resumption of international flights – a significant baseline for the plan – is still largely uncertain.
“As the development of the pandemic on the world remains unpredictable, it is hard to establish a business plan for Vietnam Airlines. Without it, we can’t assess the value of the company. Only when Vietnam Airlines returns on international routes can its business operation recover,’ Thanh remarked.
On behalf of SCIC, Thanh suggested enlisting the help of a reliable international auditing firm to assess the corporate value of Vietnam Airlines.
Meanwhile, SCIC will continue working closely with the airline and report to the Committee for Management of State Capital at Enterprises as well as other relevant authorities to ensure the efficiency and lawfulness of the investment process.
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