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VIETNAM BUSINESS NEWS MARCH 31

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Environment tax reduction on fuels to come into life from April 1

Environmental protection tax rates on fuels will be reduced from April 1 under the National Assembly (NA) Standing Committee’s resolution recently signed off by NA Chairman Vuong Dinh Hue.

Accordingly, they will be halved for petrol (except for ethanol), diesel oil, mazut, lubricating oil, and grease from April 1 through December 31. That on kerosene will be cut down by 70 percent during the period.

As a result, the tax will stand at 2,000 VND per litre for petrol (except for ethanol), 300 VND for kerosene, and 1,000 VND for diesel oil, mazut, lubricant, and grease.

Meanwhile, the rate on aviation fuels is imposed in line with another resolution issued by the NA Standing Committee on December 31, 2021.

81 percent of Vietnamese consider online shopping to be integral to everyday life: Study hinh anh 1

CAAV to closely monitor Bamboo Airways for 3-6 months

The Civil Aviation Authority of Vietnam (CAAV) will closely monitor Bamboo Airways, whose chairman Trinh Van Quyet has been detained on alleged charges of stock market manipulation, for three to six months.

The current legal representative of Bamboo Airways is general director Dang Tat Thang. Therefore, Quyet has no jurisdiction to decide the airline’s development strategy, business and fleet development plans, said Vu Hong Quang, deputy head of CAAV’s Air Transport Department.

Bamboo Airways is currently operating 29 aircraft, with the lease contract for one of them set to end at the end of this year and others in 2024, 2025 or later. CAAV has yet to receive any proposal on the suspension of the operation of Bamboo Airways’ aircraft from aircraft lessors.

According to Bamboo Airways deputy general director Nguyen Ngoc Trong, banks and financial institutions that have signed agreements with Bamboo Airways have committed to maintaining the agreements. The carrier will also fulfill all commitments with its customers.

Its financial report in 2020 showed that its equity was VND4.3 trillion as of January 1, 2020, and rose to nearly VND7.6 trillion by December 31, 2020, and VND16.76 trillion by December 31, 2021.

Government orders more measures to stabilise stock market

Deputy Prime Minister Le Minh Khai, on behalf of PM Pham Minh Chinh, has directed the implementation of measures to ensure the stock market operates in a stable, safe, smooth, public and transparent manner and develops sustainably.

He asked the Finance Minister and the Governor of the State Bank of Vietnam to instruct relevant agencies and units to keep a close watch on the developments of the domestic and foreign financial, monetary and stock markets to actively carry out appropriate governance measures.

The Finance Minister and the Chairman of the State Securities Commission were required to monitor and supervise the movements of the market in order to come up with management solutions to avoid risks and losses.

These agencies also need to actively unveil information, come up with solutions to stabilise the psychology of domestic and foreign investors, and protect their legitimate interests.

The Deputy PM requested strict punishment against any violations. He also asked the Minister of Information and Communications to direct press agencies to report accurately and truthfully.

Vietnam invests over 211 million USD abroad in Q1

Vietnam’s overseas investment reached over 211.45 million USD in the first quarter of 2022, equivalent to nearly 37 percent of that reported in the same period last year, according to the Ministry of Planning and Investment.

The amount included 180.2 million USD poured into 24 new projects, up 28.5 percent year-on-year and 31.23 million USD added to three existing ones, equal to 7.2 percent of the figure in the same period last year.

Vietnamese businesses invested in eight fields, including processing and manufacturing, mining, finance and banking, wholesale, retail, and information and communications.

Vietnamese investments were channeled into 12 countries and territories during the reviewed period. Laos was the largest recipient of Vietnamese investment in January-March, with 64.33 million USD, making up 30.4 percent of the total. It was followed by the US, which attracted 34.54 million USD from Vietnam, accounting for 16.3 percent of the amount.

As of March 20, Vietnam had 1,539 valid investment projects overseas totaling nearly 21.43 billion USD.

Vietnam – potential destination for investment in digital transformation, green transition

A forum to promote foreign investment into Vietnam themed “A new era of digital transformation and green transition” took place in London on March 30 as part of the Vietnam Days in the UK 2022.

Deputy Minister of Industry and Trade Tran Quoc Khanh said in the next 5-10 years, Vietnam will become a country with rapidly digital transformation. He affirmed that along with the boom in online payments involved by Fintech firms in recent times, Vietnam is confident towards the goal of substantive digital transformation in the near future.

Truong Gia Binh, Chairman of the Board of Directors of FPT Corporation, said Vietnam is a potential market for digital technology development with many advantages, noting that Vietnam ranks 10th in the world in technology training and boasts abundant human resources in terms of information and communication technology (ICT).

Ben Backwell, CEO of the Global Wind Energy Council, agreed that the potential for cooperation in wind power development between Vietnam and the UK remains huge, especially when Vietnam has set ambitious goals of carbon neutralisation.

The UK has strength and experience in offshore wind energy development and it can transfer technology to Vietnam in this field, he said, adding that the two countries can cooperate in managing power network.

According to Dominic Scriven, Chairman of Dragon Capital Investment Fund, Vietnam is a name that is attracting attention of foreign investors thank to its success in the COVID-19 vaccination programme, increasing competitiveness, political stability and open investment policy.

Ian Gibbons, CEO of the UK-ASEAN Business Council (UKABC), said that the Vietnamese Government has implemented the right foreign investment attraction policy with creating an open and transparent business and investment environment.

UK firms investing in Vietnam have received support from the two governments to establish or expand operations in Vietnam in all fields from education and health care to IT services, he said.

Dominic James, Director of Bilateral Trade Relations for Asia-Pacific of the UK Department for International Trade (DIT), said the UK considers Vietnam an important partner in promoting trade liberalisation in the region, and DIT is working with partners in both countries to help businesses fully tap opportunities and benefits brought by UKVFTA.

About 29,300 new firms established in Q1

About 29,300 businesses have been set up so far this year with a combined registered capital of 447.8 trillion VND (19.61 billion USD), data from the Ministry of Planning and Investment showed.

The number of the new firms saw a year-on-year decline of 1.4 percent but registered capital surged 27.5 percent.

Employee number registered by the newly-established enterprises inched up 0.8 percent to 245,600.

Some 9,600 businesses poured additional 525.3 trillion VND in capital, bringing the total figure to 973.1 trillion VND in the reviewed period.

Meanwhile, 14,700 firms resumed operations, down 0.5 percent against the same period last year.

Occupancy rate on international flights increasing

The seat occupancy on international flights has gradually increased since March 15 when Vietnam officially resumed all tourism activities in line with the policy on safety, flexible adaptation to and effective control of the COVID-19 pandemic, according to data released by domestic airlines.

Airlines have recorded a booking rate of between 60 and 80 percent on international flights to Vietnam until September. Accordingly, passengers mainly come from the Republic of Korea and Japan.

Due to the rising travel demand during the Hung Kings Death Anniversary, and National Reunification Day (April 30) and May Day (May 1) holidays, carriers have actively increased the supply of seats on international and domestic routes.

Vietnam Airlines Group, which comprises Vietnam Airlines, Pacific Airlines and Vietnam Air Services Company (VASCO), will provide nearly 750,000 seats, equivalent to nearly 4,000 flights on domestic and international routes during the holidays. Particularly, Vietnam Airlines will increase the frequency of flights on all regular international routes, expand the network with new routes such as Hanoi-Delhi and Ho Chi Minh City-Delhi, flights connecting Singapore with Da Nang, Nha Trang and Phu Quoc from April 15.

Vietjet Air is expanding the frequency of nearly 40 international routes after the Government fully reopened the tourism market on March 15 to meet market demand during the two holidays.

Apart from flights connecting Hanoi and Ho Chi Minh City with Seoul (the Republic of Korea), Tokyo (Japan), Bangkok (Thailand) and Taipei (Taiwan, China) which were resumed in early 2022, the carrier plans to restore routes linking Hanoi, HCM City, Da Nang, Hai Phong and Phu Quoc with Phuket (Thailand), Tainan and Kaohsiung (Taiwan, China), Kuala Lumpur (Malaysia), New Delhi (India), Bali (Indonesia), Busan (the RoK) and Osaka (Japan) between now and April.

FDI disbursement hits five-year high

Disbursement of foreign direct investment in Vietnam rose by 7.8 percent compared to 2021 to 4.42 billion USD in the first quarter of this year, a five-year record.

Up to 4.06 billion USD of capital was added by foreign businesses to 228 operating projects in the period, up 93.3 percent year-on-year, according to the General Statistic Office (GSO).

According to the GSO, 322 new foreign projects, capitalised at 3.21 billion USD, were licensed in the first three months, up 37.6 percent in the number of projects but down 55.5 percent in capital year-on-year.

The Foreign Investment Agency (FIA) attributed the substantial decline in newly-registered capital to fact that some large-scaled projects worth over 100 million USD were already registered in the first quarter of 2021. Capital pledged to such projects accounted for 75.3 percent of the country’s total registered capital in the reviewed period.

Meanwhile, the first quarter of this year saw only one foreign-invested project worth over 1 billion USD. That was a LEGO Manufacturing Vietnam plant, valued at 1.32 billion USD, in Binh Duong province, the FIA said.

In another bright spot, foreign investor capital contributions and share purchases doubled over the same period last year to 1.63 billion USD, which brought the total foreign investments into the country in Q1 to 8.9 billion USD, equivalent to 87.9 percent of the last year’s same period.

Great efforts needed to ensure oil, gas supply in Q2

The Ministry of Industry and Trade (MoIT) will instruct enterprises to work to ensure domestic oil and gas supply in the second quarter of this year, Deputy Minister Do Thang Hai has said.

The oil and gas supply for the next three months excludes the amount from the Nghi Son Oil Refinery, he said at a Hanoi press conference on March 30, noting that the ministry has assigned 10 major importers to push up their work.

The ministry will also hold working sessions with the refinery to review its operation and supply capacity for the third quarter, the official added.

Although the refinery has made a report on its production and supply restoration plan, there is no detailed plan for May and June.

Vietnam’s exports in Q1 up 12.9 percent

Vietnam’s export-import revenue in the first quarter of this year was estimated at 176.35 billion USD, up 14.37 percent year-on-year, of which 88.58 billion USD was from exports, a rise of 12.9 percent.

The country earned about 900 million USD from fishery export in March, a rise of up to 41 percent against the previous month and 22.4 percent as compared with the same period last year, pushing the turnover in the first quarter to 2.4 billion USD, up 38.7 percent year-on-year.

During the three-month period, the US was Vietnam’s biggest buyer, with 25.57 billion USD in revenue. It was followed by China, the European Union (EU), the Association of Southeast Asian Nations (ASEAN), the Republic of Korea (RoK) and Japan.

The ministry forecast that Vietnam’s export will continue to bounce back thanks to the recovery of the global economy, the implementation of free trade agreements (FTAs) to which Vietnam is a signatory, and supportive policies.

Hanoi to roll out major trade promotions this year

The Hanoi Department of Industry and Trade will host large-scale trade promotion events across more than 2,000 points of sale in the city to boost consumption and tourism.

Key activities of the programme will be held in May, July and November this year.

Acting Director of the municipal Industry and Trade Department Tran Thi Phuong Lan said the programme opens up chances for firms to bolster sales and meet consumer demand, as well as step up business operations and contribute to the capital city’s economic growth, particularly the trade-services sector.

Activities slated for April 15-22 are to promote Hanoi’s image as a green destination and foster domestic tourism. They are also to enhance communications on benefits of cashless payment in an effort to increase the use of this method.

Vietnamese business associations set up in Laos

Two Vietnamese business associations in central and southern Laos have been established as member organistions of the Vietnam Business Association for Cooperation and Investment in Laos (BACI).

During their first congresses, the two associations approved their charters, discussed operation orientations, and elected the executive boards for the 2022 – 2027 tenure.

During the tenure, the associations will focus on supporting their members, and play their role as bridges connecting businesses and State management agencies of Laos and Vietnam.

Chinese firms interested in investing in Binh Duong

Over 100 Chinese enterprises participated in a webinar on investment promotion in the southern province of Binh Duong on March 30.

Binh Duong has to date attracted 4,040 FDI projects with a total registered capital of 39.4 billion USD, ranking second nationwide, only after Ho Chi Minh City.

Of the total, 1,561 projects totaling over 10 billion USD are of Chinese investors. China also ranks first among 65 countries and territories pouring capital into the southern province.

In addition to efforts to boost economic development, Binh Duong has strived to expand international cooperation. The locality has so far established bilateral relations with 11 foreign provinces and cities, including China’s Guangzhou city.

Chinese enterprises expressed their interest in the province’s specific investment attraction policies.

Five agricultural and forestry material areas to be set up

The Department of Economic Cooperation and Rural Development under the Ministry of Agriculture and Rural Development (MARD) has signed a cooperation agreement with 14 agencies, enterprises and banks to develop raw material areas across the country and restructure the agricultural sector.

The signing of the deal took place within the framework of a meeting held on March 29 by the MARD to deploy a pilot project on setting up standard raw agricultural and forestry material areas for domestic consumption and export and a project on community agricultural extension for 2022-2025.

The project aims to form five concentrated raw material zones with a total area of more than 166,000 hectares, including orchards in the northern mountainous region; certified sustainable timber growing in the central coastal region; coffee cultivation in the Central Highlands; rice planting in the Long Xuyen Quadrangle and fruits in Dong Thap Muoi.

Five central localities team up to stimulate travel demand

Five central provinces – Quang Binh, Quang Tri, Thua Thien-Hue, Quang Nam, and Da Nang – jointly launched a series of culture and tourism events in Hanoi on March 30 in an attempt to stimulate tourism demand in the central region.

The five localities have seen growth in their tourism industry over recent years and become attractive destinations in both Vietnam and Asia. Statistics show they received between 20 million and 25 million arrivals per year during the 2016 – 2019 period.

As the host of the National Tourism Year 2022, Quang Nam will organise many tourism events to serve travelers throughout the year.

Outstanding upcoming activities include the Korean Culture Days in Quang Nam and the traditional craft village festival in Hoi An.

German firms keen on Vietnamese renewable energy development

German corporations and businesses have expressed their keen interest in investing in Vietnam’s renewable energy sector, as well as the country’s preferential policies for foreign firms when moving into the field.

Representatives from German firms highlighted their desire at a working session with a delegation from the Ministry of Industry and Trade (MoIT) led by MoIT Deputy Minister Dang Hoang An during a recent visit to Germany for the Berlin Energy Transition Dialogue 2022.

Accordingly, priority areas in the national power development programme will be given to power production sources which are environmentally friendly, including renewable energy sources such as offshore wind power, solar power, and biomass sources.

The meeting drew the participation of several German firms such as AHK Group, PNE Corporation, ThyssenKrupp Corporation, SkyWind Corporation, Enerrag Corporation, and Gren Solutions Corporation, in addition to Vietnamese Ambassador to Germany Vu ​​Quang Minh, and representatives from the MoIT.

The 8th Berlin Energy Transition Dialogue 2022 kicked off in Berlin, Germany, on March 29, attracting high-level delegations from more than 50 countries from around the world.

Coffee exports record impressive growth in first quarter

Following a sharp increase in both volume and price, coffee has risen to quickly become an export agricultural product with strong growth in the first quarter of the year.

Since the beginning of the year to mid-March, the whole country shipped 452,163 tonnes of coffee, raking in more than US$1 billion in export turnover, according to the latest information provided by the General Department of Customs.

In comparison to the same period last year, its export volume grew by more than 22%, whilst turnover expanded by 54.44%.

This growth in turnover was higher than the output, serving to drive the average export value of coffee products up to US$2,23 per tonne, a rise of 26.45%, equivalent to an increase of nearly US$500 per tonne.

Vietnamese coffee export markets have so far expanded to include many continents, with major buyers such as Germany, Belgium, Italy, Japan, the UK, and the United States.

Catch certificate required for four aquatic species exported to Japan

The Directorate of Fisheries recently sent an official dispatch to the Vietnam Association of Seafood Exporters and Producers (VASEP) regarding the application of the catch certificate within the Japanese market.

According to the announcement made by the Japanese Embassy in Vietnam, competent Japanese agencies will require a catch certificate for four species, including squid and cuttle fish; Pacific saury, Cololabis spp.; Mackerel, Scomber spp., and Sardine, Sardinops spp. when imported into Japan.

Moving forward, the East Asian nation is set to apply these regulations from December 1.

Japan represents the second largest market for Vietnamese seafood. Last year’s seafood exports to the Japanese market reached more than US$1.3 billion, duly accounting for 14.9% of the nation’s total seafood export value.

The first two months of this year saw seafood exports to Japan hit US$210 million, a year-on-year rise of 16%.

Report on Business Law Flow 2021 released

The Vietnam Chamber of Commerce and Industry (VCCI) on March 29 publicised its Report on Business Law Flow in 2021, the fourth edition since 2018, which reviews laws related to business in the year and reflects the view of enterprises to drafted or issued policies.

The report analyses various important legal issues affecting the business environment. This edition focuses on the quality of circulars, dispatches and the Sandbox legal space.

The report pointed out a number of problems in circulars and official dispatches which are closely related to businesses’ operations. It also clarified that amid the Government’s efforts to promote administrative reform activities and cut down compliance costs, a number of proposed policies in 2021 tended to increase business conditions.

Fitch affirms Viet Nam at ‘BB’; outlook positive

Fitch Ratings has affirmed Viet Nam’s long-term foreign-currency issuer default rating (IDR) at ‘BB’ with a positive outlook.

According to Fitch, the pandemic has had a smaller impact on Viet Nam’s public finances than the ‘BB’ median, as early success in containing the pandemic allowed for a restrained fiscal response.

Fitch noted the rating remains constrained by contingent liability risks associated with the large State-owned enterprise (SOE) sector and structural weaknesses in the banking sector.

According to Fitch, Viet Nam’s economic prospects remain susceptible to shifts in external demand due to the economy’s high degree of openness. However, the rating agency expects the export sector to continue to perform well in the medium term, benefitting from Viet Nam’s cost competitiveness, trade diversion from China and implementation of key trade agreements.

Besides, Fitch noted Viet Nam’s export-related FDI inflows have not weakened despite the supply disruptions in Q3 2021. Inward investment remained strong in 2021 at US$19.7 billion, down marginally from $20 billion in 2020.

According to Fitch, Viet Nam’s foreign-exchange reserves continued to improve in 2021, as the State Bank of Vietnam (SBV) intervened in the foreign-exchange market to stabilise the currency. Foreign-exchange reserves rose further to a record of $109.4 billion by end-2021, supported by large FDI inflows.

Security crucial in the digital transformation process

Enhancing network information security and safety was a crucial factor in the digital transformation process, the Vietnamese Network Security Joint Stock Company (VSEC) has said, warning that phishing attacks targeting the financial and banking industry might increase.

In a recent report, VSEC said that ransomware attacks, silent attacks on technology apps and attacks in the financial and banking industry were three major trends this year.

Ransomware attacks increased sharply in 2021 and would continue to do so, VSEC said, adding that ransomware infections had spread rapidly due to the growth of online learning and working platforms.

According to statistics by Cybersecurity Ventures, ransomware attacks caused an average loss of around US$102.3 million per month globally. In Viet Nam, the number of computers attacked by data encryption viruses in 2021 was more than 2.5 million, 4.5 times higher than 2020, according to a survey by Bkav. Most users were still confused and did not know how to respond when their computer was infected with malware.

Deputy prime minister maps out two new railway lines

Deputy Prime Minister Le Van Thanh has instructed the Ministry of Transport to work with southern localities and related agencies on two new railway lines.

The route linking Thu Thiem Station and Long Thanh International Airport would be 37.5 kilometres long and cost VND40.56 trillion (USD1.74 billion). Investment would be secured via a public-private partnership.

The 65 kilometre-long Bien Hoa-Vung Tau line would cost VND50.82 trillion and start from Trang Bom in Dong Nai and end at Cai Mep-Thi Vai International Port.

The two railway lines are intended to ease traffic congestion on the HCM City-Long Thanh-Dau Giay Expressway, National Highway 51 and the planned Bien Hoa-Vung Tau Expressway.

Resorts near Hanoi fully booked at weekends

People in Hanoi are flocking to resorts near the city at the weekend as the Covid-19 pandemic has been brought under control.

At 8 am on March 26, a group of 40 people came to Flamingo Dai Lai Resort in the northern province of Vinh Phuc for a weekend break.

According to Minh Anh, a tour guide of the group, groups from companies often choose five-star resorts near Hanoi for their weekend trips.

A representative from Flamingo Dai Lai Vinh Phuc Resort said that all of the resort’s rooms were booked last weekend. Most of the visitors were from Hanoi.

Avana Retreat Resort in Hoa Binh Province has been fully booked at weekends until Reunification Day (April 30) and the May Day Holiday. Many people also come to the resort from Monday to Friday to avoid crowds.

The same situation has been reported at other resorts near Hanoi such as Serena Resort Kim Boi, Mai Chau Ecolodge and Bakhan Resort Mai Chau in Hoa Binh Province and Melia Ba Vi in Ba Vi District, and Tomodachi Lang Mit in Son Tay Town in Hanoi.

The pandemic in the capital city has been brought under control, so more people want to relax following a long time of applying social distancing regulations.

They prioritise short trips to resorts around Hanoi with their relatives and friends.

Dinh Van Huynh, director of Himalaya Sapa, said that the hotel is working at around 80 percent of its capacity. Most of the customers are domestic tourists. All of the hotel’s rooms have been fully booked for the coming Reunification Day and May Day Holiday.

Vietnamese Golden Star Awards honour best local brands in 2021

The 2021 Vietnamese Golden Star Awards were presented to outstanding Vietnamese brands at a ceremony jointly held by the Vietnam Youth Federation and the Vietnam Young Entrepreneurs Association (VYEA) on March 30.

According to the organisers, the top 200 companies generated total revenue of 747 trillion VND (32.7 billion USD) in 2021, paid 40 trillion VND (1.75 billion USD) in taxes, and created jobs for 450,000 workers.

The top ten posted revenue of 554 trillion VND (24.2 billion USD), contributed 9 billion VND (394 million USD) to the state budget, and employed 107,000 workers.

Novaland set to issue nearly 490 million shares

Novaland (NVL) has planned to issue 482.6 million NVL shares to its existing shareholders to raise its charter capital this year.

The shares will be issued at a ratio of 1:0.25, meaning that for every 100 shares held, a stakeholder can buy 25 new shares. The starting price of the shares will be VND10,000 each, the local media reported.

Also, NVL is set to sell shares under the employee stock ownership plan (ESOP) at VND10,000 each. The transaction will be conducted no later than the second quarter of 2023.

Q1 sees 34,600 new businesses established

Vietnam saw around 34,600 new businesses entering the market in the first quarter of 2022, up 18% year-on-year, according to the General Statistics Office.

The new market entrants have total registered capital of VND471.2 trillion, up 5.2% year-on-year, and nearly 243,500 employees, down 0.9%, the local media reported.

In March alone, 14,300 firms were established, with total pledged capital reaching VND193.6 trillion, up a staggering 96% month-on-month.

Between January and March, 25,600 enterprises resumed their operations, up 74% year-on-year, taking the total firms operating in the local market to 60,200, up 37% year-on-year.

However, the country also saw 35,700 firms suspend their operations during the three-month period, double the figure in the same period last year. In addition, some 11,300 other enterprises halted their operations pending dissolution.

In the first quarter of 2022, 4,300 others completed procedures for disbandment, down 17% year-on-year.

GreenFeed Vietnam acquires French chicken firm

Food chain developer GreenFeed Vietnam, which owns G Kitchen, has completed the acquisition of French chicken supplier LeBoucher, with neither side disclosing the value of the deal.

LeBoucher established its presence in Vietnam in 2004. It is a member company of France’s Alain Glon Holding Asia. In Vietnam, LeBoucher is a chicken supplier for McDonald’s fast-food restaurants, high-end food retailing chain An Nam Gourmet, and others.

After the M&A deal was signed on March 28, LeBoucher became the fifth brand in GreenFeed Vietnam’s portfolio of food brands. The 19-year-old GreenFeed is widely known as the owner of chilled pork and processed product chain G Kitchen.

HCMC property firms propose removing obstacles to 64 housing projects

The HCMC Real Estate Association (HoREA) has sent a petition to the municipal government proposing the city remove obstacles to 64 commercial and social housing projects.

HoREA Chairman Le Hoang Chau said that 57 real estate firms were having difficulty with site clearance, investment procedures, and certification of land use rights and home ownership, while executing the 64 housing projects in the city.

These obstacles have yet to be eliminated for many years, according to HoREA.

Several housing projects are awaiting procedures, including the Linh Trung 2 export processing zone social housing project, the high-rise officetel and apartment project in Phu Nhuan District, the Le Thanh Tan Tao 2 social housing project and the An Phu Dong social housing project.

HCMC implements enforcement measure on tax debt of nearly VND5,500 billion

The Tax Department of HCMC has not yet collected a debt tax of over VND5, 491 billion (US$239 million) from the Century 21 Joint Stock Company (C21 JSC) that has to pay under the coercive decision issued by Thu Duc City’s Tax Department.

This amount of money includes land use levy, fines and late payment penalties; and is calculated in accordance with the decision No.4777/QD-UBND issued by the HCMC People’s Committee on December 29,2020 on approving the land price of the 30-hectare Nam Rach Chiec residential area project located in Thu Duc City’s An Phu Commune. The coercive measures are imposed for 90-day tax payment delay.

The Century 21 Joint Stock Company (C21 JSC) has submitted a petition to the municipal authorities to consider the land use levy. The company said that the 2015 price brackets could not be applied for the calculation of the tax because the land was allowed to change the land use purpose in 2008.

Axie Infinity game hacked, over $600 million stolen

Sky Mavis – a renowned startup project of 30-year-old Vietnamese CEO Nguyen Thanh Trung – is well-known for its Blockchain game named Axie Infinity. The game has been unexpectedly hacked lately, and over US$600 million was stolen, ringing an alarm to other game developers and players.

The cryptocurrency community has expressed its concern over the 625-million-dollar breach on Ronin Network, a blockchain project operated by Sky Mavis. It was detected when a user reported that he could not withdraw 5,000 Ethereum from Ronin.

Ronin Network then immediately posted an announcement on its formal Twitter account: “A security vulnerable on Ronin Network has been illegally exploited. The total stolen assets include 173,600 Ethereum and US$25.5 million, withdrawn from Ronin via two transactions”.

To deposit or withdraw money on Ronin Network, users need to be successful in 5 out of 9 authentications. Tracking has shown that the culprit used 4 hacked private security keys plus an authentication procedure controlled by a third party – Axie DAO – to withdraw money.

Ronin Network reported that most of the stolen money is still in the hacker’s e-wallet, while a certain amount has been transferred to the FTX transaction floor. Ronin Network is working with security teams of cryptocurrency transaction floors to track these sums.

Petrol prices unlikely to drop despite environmental protection tax cut

Deputy Minister of Industry and Trade Do Thang Hai said that petrol prices in Vietnam still depend on global prices. The National Assembly Standing Committee has passed a resolution allowing the reduction of the environmental protection tax on gasoline from April 1. However, if the global gasoline prices increase by VND3,000 per liter, the domestic ones will have to climb by VND1,000 per liter.

The Ministry of Industry and Trade held a press conference in the first quarter of this year on the afternoon of March 30 in Hanoi. Answering the question about the management of the petrol market and petrol price in the coming time, Deputy Minister of Industry and Trade Do Thang Hai said that the domestic petrol prices would still depend on world prices. Negotiations between Russia and Ukraine have recently made progress. Therefore, the global crude oil price declined in the last two days.

The National Assembly Standing Committee has passed a resolution allowing the reduction of environmental protection tax by VND2,000 per liter for gasoline and VND1,000 per liter for oil from April 1. However, if the world oil prices increase by VND3,000 per liter, the domestic will have to climb by VND1,000 per liter. After the average price for this operating period is available on March 31, the ministries will set a new petrol price level but ensure the harmony of the interests between fuel enterprises and consumers.

Regarding information that Nghi Son Oil Refinery has not yet planned to deliver goods in April and May, affecting supply in the near future, Deputy Minister Do Thang Hai said that in the scenario of gasoline supply in the second quarter that the Ministry of Industry and Trade stated did not take into account the amount of petroleum supplied by Nghi Son Oil Refinery. According to Mr. Hoang Anh Tuan, Deputy Director of the Domestic Market Department, after overcoming problems, Nghi Son Oil Refinery has basically restarted production; however, the Ministry of Industry and Trade has not yet received the delivery plan for the second quarter of this unit.

As for gasoline imports, Deputy Minister Do Thang Hai said that in the context that the conflict in Ukraine remained tense, petroleum importers had faced difficulties recently, such as the source of gasoline, import price, and delivery time. However, in the second quarter, the ministries will try to ensure enough petroleum supply for domestic production and consumption needs. In the third quarter, the Ministry of Industry and Trade will work with Nghi Son Oil Refinery to discuss the volume of petrol products it can supply each month. “If there is a gasoline shortage, the Ministry of Industry and Trade will continue to ask enterprises to import it,” said Deputy Minister Do Thang Hai.

81 percent of Vietnamese consider online shopping to be integral to everyday life

Eighty-one percent of Vietnamese respondents considered online shopping to be integral to everyday life, according to a regional consumer study conducted by e-commerce platform Lazada in collaboration with Milieu Insight.

The study surveyed 6,000 online shoppers, 1,000 from each country, on their current and future commerce behaviours and attitudes. It was conducted in January 2022 across six Southeast Asian markets – Vietnam, Singapore, Malaysia, Thailand, Indonesia, and the Philippines.

Its findings show that 59 percent of Vietnamese digital consumers made online purchase at least once per week. Some 85 percent said they have been spending more online since the outset of COVID-19.

About 66 percent of respondents said that they always seek the best deal to optimise household expenses and 52 percent a strong preference for shopping from local brands.

Source: VNA/VIR/SGT/VNS/VOV/Dtinews/SGGP

Source: https://vietnamnet.vn/en/business/vietnam-business-news-march-31-827049.html

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Samsung workers in Vietnam bear brunt of slowdown in global demand for electronics

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Samsung Electronics Co Ltd has scaled back production at its massive smartphone plant in Vietnam, employees say, as retailers and warehouses grapple with rising inventory amid a global fall in consumer spending.

America’s largest warehouse market is full and major U.S. retailers such as Best Buy and Target Corp warn of slowing sales as shoppers tighten their belts after early COVID-era spending binges.

The effect is acutely felt in Vietnam’s northern province of Thai Nguyen, one of Samsung’s two mobile manufacturing bases in the country where the world’s largest smartphone vendor churns out half of its phone output, according to the Vietnam government.

Samsung, which shipped around 270 million smartphones in 2021, says the campus has the capacity to make around 100 million devices a year, according to its website.

“We are going to work just three days per week, some lines are adjusting to a four-day workweek instead of six before, and of course no overtime is needed,” Pham Thi Thuong, a 28-year-old worker at the plant told Reuters.

“Business activities were even more robust during this time last year when the COVID-19 outbreak was at its peak. It’s so tepid now.”

Reuters could not immediately establish whether Samsung is shifting production to other manufacturing bases to make up for reduced output from the Vietnamese factory. The company also makes phones in South Korea and India.

Samsung told Reuters it has not discussed reducing its annual production target in Vietnam.

The South Korean tech giant is relatively optimistic about smartphone demand in the second half, saying on its earnings call last week that supply disruptions had mostly been resolved and that demand would either stay flat or even see single-digit growth.

It is aiming for foldable phone sales to surpass that of its past flagship smartphone, the Galaxy Note, in the second half. It is expected to unveil its latest foldables on Aug. 10.

But a dozen workers interviewed by Reuters outside the factory almost all said business is not good.

Thuong and her friends who have been working for Samsung for around five years said they had never seen deeper production cuts.

“Of course there is a low season every year, often around June-July, but low means no OT (overtime), not workday cuts like this,” Thuong said.

She said managers had told workers inventories were high and there were not many new orders.

Research firm Gartner expects global smartphone shipments to decline by 6% this year due to consumer spending cuts and a sharp sales drop in China.

Samsung town

Samsung is Vietnam’s biggest foreign investor and exporter, with six factories across the country, from northern industrial hubs Thai Nguyen and Bac Ninh where most phones and parts are manufactured, to Ho Chi Minh City’s plant making fridges and washing machines.

The South Korean company has poured $18 billion into Vietnam, powering the country’s economic growth. Samsung alone contributes one fifth of Vietnam’s total exports.

Its arrival nearly a decade ago in Thai Nguyen, about 65 km (40 miles) from the capital Hanoi, transformed the area from a sleepy farming district into a sprawling industrial hub that now also manufactures phones for Chinese brands including Xiaomi Corp.

Generous benefits including subsidised or free meals and accommodation have lured tens of thousands of young workers to the region, but reduced workhours have now left many feeling the pinch.

“My salary was cut by half last month because I just worked four days and spent the remaining week doing nothing,” said worker Nguyen Thi Tuoi.

Job cuts are on some workers’ minds but so far none have been announced.

“I don’t think there will be job cuts, just some working hour cuts to suit the current global situation,” said one worker, declining to be named because she did not want to risk her team leader role.

“I do hope that the current cut will not last long and we will soon be back to normal pace.”

Source: https://tuoitrenews.vn/news/business/20220804/samsung-workers-in-vietnam-bear-brunt-of-slowdown-in-global-demand-for-electronics/68444.html

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Government debt drops by VND57 trillion when exchange rate fluctuates

Public debt is not much affected by the increase in the USD. The evolution of outstanding loans and debt repayment obligations is still under control.

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According to the Ministry of Finance, based on the selling rate of the State Bank, from the beginning of the year until August 1, 2022, one USD equals VND23,400  an increase of 1.1% compared to the beginning of 2022 estimated to increase the Government debt balance in USD in VND by about VND 5 trillion (compared to the end of 2021).

One EUR equals 24,385 VND, down 9.5% compared to the beginning of 2022. It is estimated to reduce the outstanding government debt in EUR in VND by about VND17 trillion ($727 million) compared to the end of 2021.

JPY is equal to 180 VND, down 13% compared to the beginning of 2022. It is estimated that the government debt balance in JPY in VND is about VND45 trillion ($1.9 billion) compared to the end of 2021.

According to the Ministry of Finance, only taking into account the exchange rate fluctuations of 3 main currencies USD, JPY, and EUR, the government debt balance by the end of 2022 is estimated to decrease by about VND57 trillion ($2.4 billion) down 2% compared to the last outstanding balance 2021.

Currently, the volume of domestic loans from the Government accounts for 90% and foreign debts only account for about 10% of the total annual value.

As reported by the Ministry of Finance, from the beginning of the year to July 31, 2022, repayment of government debt is about VND192,122 billion ($8.2 billion) (57.2% of the plan), of which domestic debt repayment is VND148,717 billion ($6.3 billion), foreign debt payment VND43,406 billion ($1.8 billion); direct government debt repayment is about VND 175,835 billion ($7.5 billion)  (58.6% of the plan), on-lending is about VND16,287 billion ($696 million) (45.3% of the plan). The Government’s direct loan repayment obligation compared with state budget revenue in the first 7 months is about 16.1%.

Source: VGP

Source: https://e.nhipcaudautu.vn/economy/government-debt-drops-by-vnd57-trillion-when-exchange-rate-fluctuates-3347118/

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Vietnam’s THACO and philosophy of no surrender

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Truong Hai Auto Corporation (THACO), a typical successful firm in Vietnam’s automobile sector, has been investing heavily in mechanics and the manufacturing of accessories.

THACO leaders shared the firm’s journey to resolve the issue: increasing the localization rate or surrendering to auto imports flooding the local market.

They also shared the one-stop model to help other Vietnamese enterprises cooperate to develop, thereby improving the internal power of Vietnam’s industry.

THACO chairman Tran Ba Duong said at a meeting with mechanical enterprises that “you have technology and machinery. We will build factories and lease them at low prices.”

“If we fail to demonstrate our commitment, you can take your machinery away.

“We will not go back on our words. Only actual acts and thoughts will create values.”

Refreshing itself by enhancing investment

Returning to Chu Lai Industrial Park in central Quang Nam Province nearly three years after Tuoi Tre (Youth) newspaper held the forum ‘Last chance for Vietnam’s automobile industry,’ a series of factories mushroomed, and container trucks have been nose to tail.

The industrial park is home to not only THACO automobile assembly factories measuring thousands of hectares in area but also newly-built factories manufacturing accessories and mechanical products.

Enthusiastically sharing a project to develop THACO Chu Lai into a hub manufacturing mechanical products, accessories, and devices for industries in the central region, Do Minh Tam, general director of Truong Hai Supporting Industries and Mechanics Limited Liability Company (THACO Industries), an arm of THACO, expected the project to boost the development of Vietnam’s industry.

“At first, everyone seemed dubious. They only thought of automobiles whenever mentioning THACO. However, we separated mechanics from the automobile segment in November 2021,” Tam said.

From 17 factories producing automobile parts, THACO Industries has developed a complex of 19 factories whose strategy is to concurrently increase the localization rate and supply accessories and mechanical products to the domestic and foreign markets.

It is a must to develop the factories on a large scale and in a methodical manner as in 2019, THACO and many other automobile manufacturing and assembly enterprises faced a selection: increasing the localization rate or letting car imports flood the local market due to their competitive advantage given import tariff cuts.

Fruitful results and development ambitions

Nevertheless, it is not easy to develop an empire.

In 2021, a meeting on the restructuring of the firm was held by key leaders to choose a new business model, restructure a board responsible for the company’s products because of its more diversified product portfolio, develop a research and development (R&D) center, and boost digitalization, Tam remembered.

However, the results surprised many people. With revenue from mechanics amounting to VND5.7 trillion (US$244.2 million) in 2021, THACO Industries set a target to generate revenue of $1 billion by 2025 and invest in 15 more factories, operating in the mechanics, automobile, agricultural mechanics, construction, household appliance, and product design sectors.

“Mechanical accessories, electric wires, car seats, specialty chemicals, and bodywork will be localized first,” Tam said.

“Once our staff are experienced and we can research and develop as well as design products, we will expand to industrial equipment.”

Multifunctional model

According to Tam, together with changes in supply chains, purchasers have had a higher demand for the one-stop model, which is like a food market with multiple dishes.

With THACO Industries’ advantages in a closed manufacturing chain with lower logistics costs, THACO has repeatedly secured orders of foreign direct investment enterprises, including those ordering a combo of molds, plastic injection equipment, paint and packaging services, instead of sourcing them from four to five separate suppliers.

THACO has a plan to develop industrial parks in the north and the south of the country, thus establishing new-generation specialized industrial parks to suspend the transport of huge volumes of products from Chu Lai to other provinces.

“The close connection and support in the three regions will contribute to optimizing the effectiveness of our value chain, reducing logistics costs, improving the competitiveness, and opening up new business opportunities,” Tam noted.

He added that THACO had also sought to develop a mechanical engineering outsourcing center in association with R&D to support small and medium enterprises in southern Binh Duong Province. The center will be developed under the one-stop model.

This will not be a normal mechanic engineering outsourcing center. R&D services and core technology will be invested in heavily.

Employees monitor a spring production system at the THACO Chu Lai Industrial Park in Quang Nam Province. Photo: Huu Hanh / Tuoi Tre

Employees monitor a spring production system at THACO Chu Lai Industrial Park in Quang Nam Province, Vietnam. Photo: Huu Hanh / Tuoi Tre

The center is expected to attract enterprises with the same sense of purpose of getting involved in global production chains and forming a sustainable mechanical engineering ecosystem.

No rivals, only partners

In the past, THACO manufactured and assembled automobile models for KIA and Mazda and it could be considered a rival of Hyundai and Ford. 

However, with the policy of making friends with partners, THACO is currently manufacturing plastic bumpers for Hyundai Vietnam and Toyota at a lower price than those offered by Thai manufacturers. 

It is also a supplier of springs for Isuzu Vietnam, and will be a partner of Ford Ranger in the near future. 

THACO has launched four cooperation models: partners manufacturing and outsourcing products for THACO; THACO manufacturing and outsourcing the entire or part of products for R&D enterprises; THACO offering R&D services and manufacturing, outsourcing and providing products for enterprises having their own markets; and THACO and partners joining hands to manufacture products. 

These models are expected to enhance the cooperation and competitiveness of enterprises, creating a strong industrial ecosystem and manufacturing society to pave the way for the breakthrough of the mechanical engineering sector and supporting industries.

Methodical support needed

Tam said state agencies’ support should be more methodical and specific.

Amid the shift of foreign investment to Vietnam, if institutes and state agencies conduct macro-scale and specialized research, or assess the advantages and competitiveness of Vietnam’s mechanical engineering sector, enterprises will have more information to grasp opportunities.

It will be too late to make investments after securing orders. 

In addition, the mechanical engineering sector requires large capital while the rate of return is low. Therefore, to secure orders, the state should issue appropriate preferential interest policies for each sector. 

Moreover, it is advised to focus on labor training on the basis of support packages for schools and students in engineering majors to help them approach advanced technology and techniques. 

Incentives in taxes, land, and site clearance are also needed for companies to scale up their investment.

Notably, the development of industrial parks should involve plans to connect them with value chains, associated with expanding markets and seeking new customers.

 

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Source: https://tuoitrenews.vn/news/business/20220804/vietnam-s-thaco-and-philosophy-of-no-surrender/68420.html

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