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VIETNAM BUSINESS NEWS OCTOBER 11

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Con Dao airport to be upgraded to serve larger aircraft

The Civil Aviation Authority of Vietnam (CAAV) has submitted a proposal to the Ministry of Transport on investing in a project to upgrade Con Dao airport in the southern province of Ba Ria – Vung Tau, enabling it to receive larger aircraft.

According to the CAAV’s proposal, in 2021, investment will be poured into upgrading the runway system to ensure the effective exploitation of code-C aircraft such as: A321ceo, A321neo, A320neo, A319 or equivalent aircraft in order to meet the increasing travel demand at the airport.

Accordingly, the project will upgrade and expand the airport’s existing runway, build three connecting taxiways and one parallel taxiway, install the precise landing gear system of the runway and the approach lighting system in line with the approved planning.

Work of the project is expected to start in 2021 and be completed in 2023, with a total capital of nearly 2.4 trillion VND (105.5 million USD) sourced from the State budget.

Despite impacts from the COVID-19 pandemic, the Con Dao airport served 447,750 passengers in 2020, up 4.1 percent from 2019.

In the adjusted airport planning by 2030 recently approved by Minister of Transport Nguyen Van The, the Con Dao airport will have a capacity of serving 2 million passengers and 4,400 tonnes of cargo per year./.

Vietnamese startup in automated invoicing raises 3 million USD

Vietnamese startup in automated invoicing raises 3 million USD hinh anh 1

Co-founders of Bizzi Vu Trong Nghia (R) and Nguyen Bao Nguyen (Photo: vneconomy.vn)

The developer of Bizzi, a software as a service (SaaS) which simplifies invoice processing, has successfully raised 3 million USD during a pre-Series A round.

The sum will be pumped by a consortium led by Japan’s leading FinTech/SaaS firm Money Forward, with the participation of Do Ventures from Vietnam and Qualgro from Singapore.

The robotic process automation (RPA) technology and machine learning of Bizzi help cut 80 percent of processing time and 50 percent of cost in invoice handling, while increasing transparency and tax obligation amongst businesses.

Bizzi is the first company in Vietnam to offer automation solutions for invoice processing via artificial intelligence and the RPA technology. Its platform can be integrated with existing accounting solutions and connect services providers with customers to automatise financial procedures.

Executive Officer/CSO at Money Forward Kanto Tatsuya said Bizzi has created a huge impact by helping thousands of firms in digital transformation.

The Japanese mobile application software developer will support Bizzi to build the largest account book software in Vietnam based on experience from its own Money Forward Cloud, he added.

Co-founders of Bizzi Vu Trong Nghia and Nguyen Bao Nguyen said the new investment will help them bolster the product’s functions and expand customer network.

They underscored that Vietnam remains the firm’s key market in the near future, and it will consider the possibility to expand to the Southeast Asian market.

At present, Bizzi’s customers include Grab super app, Circle K convenience store chain and Tiki e-commerce platform, among others. Total values of invoice handled through Bizzi exceed 300 million USD per month./.

Reference exchange rate up 5 VND at week’s beginning

The State Bank of Vietnam set the daily reference exchange rate at 23,170 VND/USD on October 11, up 5 VND from the last working day of previous week (October 8).

With the current trading band of +/- 3 percent, the ceiling rate applicable to commercial banks during the day is 23,864 VND/USD and the ceiling rate 22,475 VND/USD.

The opening-hour rate at commercial banks stayed stable.

At 8:30 am, Vietcombank listed the buying rate at 22,630 VND/USD (buying) and the selling rate 22,860 VND/USD (selling).

BIDV also kept both rates unchanged from October 8 at 22,660 VND/USD (buying) and 22,860 VND/USD (selling)./.

Vietnamese Ambassador to Russia inspects Rusvietpetro joint venture’s production

Vietnamese Ambassador to Russia Dang Minh Khoi made a working trip to the Nenets autonomous region of Russia on October 6-7, during which he inspected production activities of the Russia-Vietnam oil and gas joint venture (Rusvietpetro) in North Khosedaiu field.

The Vietnamese diplomat highly valued the spirit and efforts of Rusvietpetro’s leaders, as well as Vietnamese workers for their effective coordination with Russian partner sdespite difficult and harsh working conditions.

He expressed satisfaction with the joint venture’s efforts in ensuring the spiritual life and working environment for the staff, affirming that Rusvietpetro is an important impetus for the comprehensive strategic partnership between Vietnam and Russia.

Ambassador Khoi also had a working session with Yury Bezdudnuy, Governor of the Nenets autonomous region, during which the ambassador expressed his hope that the Governor and officials of the region will continue to create the most favourable conditions for the Rusvietpetro joint venture.

Zarubezhneft and the Vietnam Oil and Gas Group (PetroVietnam) formed the Rusvietpetro joint venture in September 2008 with Petro Vietnam having a 49 percent stake. This is the most successful offshore investment project of PetroVietnam in the field of oil and gas exploration and production.

As of August 31, 2021, the joint venture had exploited 30.48 million tonnes of oil, and total profit transferred to Vietnam reached 1.263 billion USD.

In 2021, Rusvietpetro targets to exploit over 3 million tonnes of crude oil with an estimated revenue of over 1.3 billion USD and post-tax profit around 410 million USD./.

Vietnam remains important production centre for global brands

Despite the fourth wave of the COVID-19 pandemic having a great impact on the textile, garment, and footwear supply chain, representatives of several major brands still believe that the nation remains an important production centre for them.

This is the view held by representatives from the Vietnam Textile and Apparel Association (VITAS), the Vietnam Leather, Footwear and Handbag Association (LEFASO), and the Public Private Partnership (PPP) group.

With obvious advantages such as a pool of young and qualified workers, its strategic location, convenient transportation to both the United States and the EU, businesses still continue to do business in the Vietnamese market, despite being affected by the fourth pandemic wave.

However, due to social distancing measures being taken in many localities nationwide during the pandemic, many companies have been forced to diversify their supply chains, said the general director of Li&Fung ASEAN, which runs more than 300 factories in the country.

A representative from a US firm with more than 100 suppliers in the nation shared, “Vietnam remains our number one supplier and that has not changed. But the recent social distancing shows the risk of being too dependent on one country, whether we move orders or not depends on whether Vietnam can reopen quickly or not.”

Recently, Lefaso has rejected rumours regarding Nike potentially moving production out of the country.

This comes after rumours spread on social media about Nike moving production out of the nation to China and Indonesia proved to be incorrect, stated Phan Thi Thanh Xuan, vice chairwoman and general secretary of the Vietnam Leather and Footwear Association (Lefaso).

Xuan went on to state that 88 out of Nike’s 112 factories in the country are located in the southeast region, which produce many best-selling Nike-branded sneaker products.

She said complicated developments relating to COVID-19 locally impacted the production activities of enterprises in the garment-textile and footwear industries, with Nike forced to move a number of orders to other countries. However, there is no possibility of Nike moving production outside of the Vietnamese market, she affirmed.

Despite representatives from several big brands insisting on attaching importance to the Vietnamese market, if production is not restored again in the near future, there is a high risk that some foreign firms will move urgent orders within the next five months to ensure their supply chains. This will may only be a temporary shift however, not a long-term one, in order to meet the large shopping demand at the end of the year in both Europe and the US.

According to Xuan, the conditions for opening production moving into the new situation remain complicated, especially when moving workers from one locality to another as businesses are also exhausted financially.

Therefore, facing strict regulations regarding opening up, some businesses accept the need to resume production activities and then pay fines later, because if they continue to close they face the possibility of going bankrupt.

While a number of foreign companies have moved part of their production or orders to other countries, many still see the nation as a good location for investment in the long term.

Speaking during a virtual conference called ‘Invest in Vietnam. Wins and challenges’ organised by Adamed and Davipharm last week, Nguyen Hai Minh, partner at Mazars and Vice Chairman of EuroCham, said, “In Vietnam, FDI plays an important role, contributing a lot to the growth of the country, especially exports.”

“There has been a slowdown in foreign investment in the country this year due to COVID-19, with some people being concerned that foreign investors would not move forward with their investments or even move out of the country,” he said.

“So Eurocham did a survey in August. It showed that 18 percent of surveyed companies have already shifted part of their production to other countries and another 16 percent are still considering.

“But we need to be very specific here to have a correct understanding of the situation. Companies actually are not moving factories or investment out of Vietnam, but just part of their production and orders.

Michal Wieczorek, CEO of Davipharm, said he saw a great opportunity in Vietnam’s pharmaceutical market.

Whilst domestically-produced drugs only met 47% of demand, healthcare spending was expected to continue to grow, due to an ageing population with an increase in non-communicable diseases, with there being growth in the private hospital sector, he said.

The nation’s pharmaceutical market would likely remain as one of the fastest growing in the world, Wieczirek noted.

When Adamed bought 70% of shares in Davipharm in 2017 to become the biggest direct Polish investor in the nation, it had a crystal-clear strategy, he said.

Despite challenges caused by the pandemic, the company succeeded in achieving the EU-GMP certification for the drug manufacturing line in its factory in Binh Duong.

“With this EU-GMP certification, we are ready to achieve our other ambitious goals,” he said.

Jean-Jacques Bouflet, former head of Trade Affairs in the EU Delegation to Vietnam, said since last year foreign businesses had experienced many regulatory challenges.

Today, faced with the reality of the pandemic, the country should also find a solution to live with COVID-19 since having workers live on-site has proved to be very difficult for companies to implement, he said.

“The global COVID situation has proved that it is possible to combine both health protection and economic activities. This is what we need in Vietnam today: running an economy with welcoming institutional regulations for foreign investors, especially the pharmaceutical industry, which is so critical for protecting health,” Wieczorek said. Adding, “If the Government creates an attractive and welcoming investment environment for the pharmaceutical industry, I’m convinced that many more companies will follow in our footsteps.”

“But we need incentives, not obstacles. Unquestionably, Vietnam is going to stay on the list of top priorities for Adamed this year and in future,” he explained.

Vietnam’s economy to rebound in Quarter 4: Mirae Asset

The Mirae Asset Financial Group of the Republic of Korea has forecast the Vietnamese economy is likely to expand 4% in the fourth quarter of 2021 and 2.3% for the whole year after suffering a contraction of 6.17% in the third quarter due to the impact of the COVID-19 pandemic.

Despite suffering a contraction of 6.17% in the third quarter due to the impact of the COVID-19 pandemic, international financiers, inclluding Mirae Asset, believe Vietnam’s economy is likely to bounce back in the fourth quarter and maintain its high growth in 2022.

Mirae Asset experts say Vietnam would achieve the growth driven by public investment disbursement and FDI attraction when the government gradually reopens its economy in the three remaining months of the year.

In a recently issued report, Mirae Asset states despite a sharp decline in the previous three quarters, public investment will serve as the driving force behind economic recovery in the last quarter of the year when Vietnam switches from a strategy of ‘Zero COVID-19’ to a model of ‘living safely with the pandemic’ .

Indeed, the government is gradually easing social distancing measures and partially opening the economy in localities, along with speeding up COVID-19 vaccinations and implementing solutions to support growth.

Meanwhile, despite the COVID-19 impact nine-month FDI inflows into Vietnam continued to maintain double-digit growth, which shows foreign investors have still placed their trust in the country’s business climate.

Data from the General Statistics Office show the opening nine months of 2021 saw Vietnam attract US$22.15 billion worth of FDI, up 4.4% from a year earlier. Of the total, the newly registered capital was US$12.5 billion, up 20.6% year on year, and the adjusted capital was US$6.4 billion, up 25.6% year on year.

In 2022, when the vaccination rate is expected to reach over 70%, and Vietnam gets used to the model of living safely with COVID-19, Mirae Asset experts believe that its economy will expand 5.7% in the base scenario and 6.2% in the positive scenario.

B2B meeting to connect Vietnamese, RoK enterprises

Vietnamese enterprises will meet 19 companies from the Republic of Korea’s Jeollanam-do province during a virtual event to be held by the Korea Trade-Investment Promotion Agency (KOTRA) in Hanoi from October 18 – 22.

During the B2B meeting, Korean firms are expected to introduce a wide variety of products in agriculture and fisheries, cosmetics, industry and energy with the purpose of seeking Vietnamese partners for distributing the goods in Vietnam.

Located in the southwestern region of the RoK, Jeollanam-do is the country’s large producer of rice, wheat, barley, beans, potatoes, vegetables, cotton and fruits thanks to its favourable climate and success in applying high technology in developing agriculture, according to KOTRA Hanoi.

The Korean province has established representative offices all over the world, including Vietnam. It has been exporting organic and high-quality agricultural and fisheries products, such as mushrooms, abalone and pear, to Vietnam.

Last year, the RoK was Vietnam’s third largest trade partner, after China and the United States, with the two-way trade reaching 66 billion USD. Vietnam’s exports of agricultural and fisheries products, and processed food to the East Asian country totalled 1.2 billion USD.

In the first eight months of this year, the bilateral trade was valued at 49.17 billion USD, of which Vietnam’s exports to the RoK were worth 14.12 billion USD and imports 35.05 billion USD./.

Vietnam, Australia to sign enhanced economic engagement strategy

A recent ministerial conference has adopted the Vietnam-Australia enhanced economic engagement strategy for 2021-2025 which is now being submitted to the two governments for approval.

Both Vietnam and Australia have emphasised the need to implement the enhanced economic engagement strategy in order to fully tap their cooperation potential. (Photo: baodautu.vn)
Co-chairing the October 8 conference, Vietnamese Minister of Planning and Investment Nguyen Chi Dung said the strategy plays an important role in realizing Vietnam’s Socio-Economic Development Plan for 2021-2025, aiming to turn the country into a developing economy that will have a modern industrial development level and overcome the low-middle-income trap by 2025.

To achieve the goal, Dung said Vietnam will focus on economic recovery in the post-pandemic period, perfect the socialist-oriented market economy institution, accelerate economic restructuring closely linked to renewing the growth model, and develop the digital economy.

The government will step up the construction and development of a modern synchronous infrastructure system, and improve the quality of human resources in association with promoting innovation and strong application of sci-tech advancement, while proactively integrating into global economy.

According to Minister Dung, the Vietnam – Australia economic relations have continued to develop dynamically and effectively despite the impact of the COVID-19 pandemic.

Trade between Australia and Vietnam has grown by almost 10% each year for the past two decades.  This impressive record has been fuelled by Vietnam’s economic growth, ongoing industrialisation and expanding export sector.  Vietnam is now Australia’s 15th largest trading partner, climbing six rankings in the last 20 years. 

Australia’s top exports to Vietnam include coal, iron ore, live animals, education and cotton.  Vietnam’s major exports to Australia include communications equipment, crude petroleum, clothing and footwear.  Vietnam is a popular destination for Australian tourists and for Australia’s sizeable Vietnamese community.

Meanwhile, two-way investment is worth more than AU$3.5 billion, and the goal is to double that figure. Although bilateral investment is the highest it has ever been, it is still less than 0.1% of Australia’s two-way investment with the rest of the world, highlighting the potential for significant future growth.

In addition, Australia is one of the largest non-refundable ODA partners for Vietnam. “Australia’s ODA projects have met Vietnam’s development requirements, helping the country address its difficult challenges,” Minister Dung emphasized.

He noted that there is much room for the two countries to fully tap into their cooperation potential, and the 2021-2025 strategy is expected to realize that goal.

For his part, Australian Minister for Trade, Tourism and Investment Daniel Tehan, said Australia attaches importance to implementing the strategy, considering it the foundation for bilateral economic cooperation in the coming years. Australia will act on opportunities to fulfil the target of becoming one of the top 10 trading partners of Vietnam, he affirmed.

The idea of formulating the Enhanced Economic Engagement Strategy was put forward during the 2019 talks between Australian Prime Minister Scott Morrison and the then Vietnamese PM Nguyen Xuan Phuc to further promote the two countries’ trade and investment ties.

The strategy, which aims to put both countries on track to become top 10 trading partners and double two-way investment, will cover two-way trade, investment and other economic cooperation including recommended actions for each country.

Vietnamese, RoK enterprises to introduce products during B2B meeting

Vietnamese firms are set to meet 19 companies from the Republic of Korea’s Jeollanam-do province during an online event from October 18 to October 22 which will be held by the Korea Trade-Investment Promotion Agency (KOTRA) in Hanoi.

During the course of the B2B meeting, Korean companies are expected to introduce a broad array of products in agriculture and fisheries, cosmetics, industry, and energy, with the purpose of seeking Vietnamese partners who can distribute their goods domestically.

Located in the southwestern region of the RoK, Jeollanam-do represents the country’s large producer of rice, wheat, barley, beans, potatoes, vegetables, cotton, and fruits thanks to its favourable climate and success in applying high technology in terms of developing agriculture, according to KOTRA Hanoi.

The Korean province has also established representative offices globally, including in the nation and has been exporting organic and high-quality agricultural and fisheries products, such as mushrooms, abalones, and pears to the Vietnamese market.

Last year saw the RoK as the third largest Vietnamese trading partner, behind only China and the United States, with two-way trade hitting US$66 billion. Vietnamese exports of agricultural and fisheries products, along with processed food to the East Asian country, totaled US$1.2 billion.

During the opening eight months of this year bilateral trade reached US$49.17 billion, of which Vietnamese exports to the RoK were worth US$14.12 billion and imports stood at US$35.05 billion, respectively.

Vietnam Airlines operates seven flights on first day of domestic flight resumption

Vietnam Airlines operated 7 domestic flights on October 10, the first day after the resumption of domestic flights.

To be able to board the flights, passengers must meet requirements on negative testing for SARS-CoV-2, full vaccination against COVID-19, medical declaration and adherence to 5K. Those who fly to Hanoi need to have confirmation of a quarantine facility in Hanoi before departure.

The occupancy rates on Vietnam Airlines flights from Hanoi and Ho Chi Minh City during the day ranged from 70 to 100 percent, but were lower on flights from other localities. All flights apply distancing seating in line with requirement.

The airline strictly follows standards in aircraft disinfection and epidemic prevention rules.

The national flag carrier has resumed services on the routes between Hanoi and Ho Chi Minh City/Da Nang, HCM City and Hai Phong/Vinh/Thanh Hoa/Quy Nhon/Hue/ Da Nang/Quang Nam/Dong Hoi/ Nha Trang/Tuy Hoa/Phu Quoc. Its subsidiary Vasco also resumed flights between HCM City and Rach Gia/Ca Mau./.

Agro-forestry-fisheries export hits 35.5 bln USD in nine months

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The agricultural sector remained a pillar of the country’s economy, bringing in 35.5 billion USD from the export of agro-forestry-fishery products in the fist nine months of this year, a 17.7 percent increase compared to the same period in 2020, according to the Ministry of Agriculture and Rural Development.

The ministry reported that farm produce staples accounted for 15.8 billion USD (14.4 percent), while main forestry products contributed nearly 12 billion USD and fisheries products 6.2 billion USD.

The agricultural sector saw added value in the third quarter increase 1.04 percent compared to the same period last year, pushing the nine-month growth rate of the sector’s added value to 2.74 percent and contributed 23.5 percent to the national economy’s overall growth./.

RoK keen on M&A deals on consumer goods, food, beverages, and retail sectors

The Vietnamese consumer goods, food, beverage, and retail sectors are projected to attract investors from the Republic of Korea (RoK) through mergers and acquisitions (M&A) channels in the near future, according to industry insiders.

During a recent online event “M&A Vietnam – Republic of Korea 2021”, Andrew D. Kim, manager of the Global M&A Center at the Korea Trade-Investment Promotion Agency (KOTRA), revealed that RoK companies, especially small and medium-sized enterprises (SMEs), have shown a keen interest in the Vietnamese M&A market. 

He added that despite the RoK’s FDI inflows into the nation plunged by 40.7% due to the COVID-19 pandemic, RoK enterprises have drawn up several plans for the post-pandemic period.

Along with fields such as consumer goods, food, beverage, and retail, RoK investors have been active in other sectors, including real estate, agriculture, pharmaceuticals, healthcare, telecommunications, technology, and banking-finance.

Most notably, RoK enterprises tend to acquire the majority of shares in Vietnamese firms with the rate of equity investment increasing from 78% in 2019 to 95% in 2020.

According to statistics released by MergerMarket, the RoK investors have carried out 69 M&A deals with a total value of US$5.1 billion in the Vietnamese market from 2005 to 2021.

Son Won-sik, director of Vietnam Korean Services Group at Deloitte Vietnam, has advised foreign investors to pay close attention to factors such as quality of profit, net debt, and cash flow of businesses when conducting M&A activities, especially amid the complicated nature of COVID-19 pandemic.

According to experts, investors should also choose an experienced consultant capable of providing sufficient service and expertise in the Vietnamese market as a means of successfully implement M&A deals moving into the ‘new normal’ situation.

Le Song Lai, deputy general director of State Capital Investment Corporation (SCIC), revealed that foreign investors who want to acquire equities from SCIC are not required to go through special review procedures.

This move is anticipated to create favorable conditions for RoK investors when conducting M&A activities in the nation.

Figures from the Ministry of Planning and Investment have indicated that the RoK remains the second largest foreign investor in the Vietnamese market with a total FDI capital reaching approximately US$3.6 billion during the opening eight months of the year.

Thai Binh works to clear hurdles for enterprises

The authorities in the northern province of Thai Binh have stepped up work in investment attraction and easing obstacles for firms in a practical and effective manner.

As heard at a meeting of the provincial People’s Committee on the socio-economic situation in August and the first eight months of the year, in August, despite complicated developments of COVID-19, under the authorities’ drastic direction, the local people’s health and safety were ensured, while stable economic development was sustained.

Thai Binh’s August industrial production value increased by 1.8 percent compared to July and increased by 35.9 percent on-year. The value amounted to over 48.6 trillion VND (2.13 billion USD) during January – August, up 13.6 percent annually.

Also in the eight-month period, the province’s total budget revenue was estimated at 14,287 billion VND, equaling 97.6 percent of the plan for the period, and growing 8.6 percent over the same period last year.

By August 20, Thai Binh had approved and adjusted investment policies for 49 projects, with their freshly and additionally registered capital exceeding 10.3 billion VND.

Nguyen Khac Than, Vice Secretary of the provincial Party Committee and Chairman of the provincial People’s Committee, has requested all-level competent agencies and sectors to focus on COVID-19 prevention and control, direct agricultural production, and conduct measures for natural disasters prevention and control.

Attracting investment, tackling difficulties for enterprises, and speeding up the disbursement of public investment and the building of a medium-term public investment plan and a public investment plan for 2022 are also necessary, the official added./.

State Treasury purchases 150 million USD from commercial banks

The Vietnam State Treasury (VST) has successfully purchased 150 million USD from 30 commercial banks, said Luu Hoang, head of the VST Department of Treasury Management.

The transactions completed on October 8, while the payment date is scheduled on October 11, said Hoang.

He said that earlier, the VST announced a public offering to 45 commercial banks licensed to trade foreign currency, aiming to buy 150 million USD.

The spot foreign currency offering is a new implementation which has just been approved by the Prime Minister to purchase foreign currencies from banks for foreign currency payments of the State budget./.

Vietnam, Australia look to beef up economic cooperation

Vietnamese Minister of Planning and Investment Nguyen Chi Dung and Australian Minister for Trade, Investment and Tourism Dan Tehan shared the hope that the Australia-Vietnam Enhanced Economic Engagement Strategy in 2021-2025 will be launched  this year.

In a joint communique issued after the second Vietnam-Australia Economic Partnership Meeting (EPM) which took place virtually on October 8, the two ministers said the strategy will consolidate the two countries’ joint commitment to trade liberalization and economic connectivity.
 
The strategy recognizes huge two-way business opportunities across sectors, including agriculture, energy and resources, manufacturing, tourism and hotel, education and professional services, and technology and digital economy, and focuses on measures to speed up post-pandemic economic recovery, according to the statement.

The ministers assessed that the Vietnam-Australia strategic partnership and the action plan signed between the two sides have provided a further boost to the realisation of the shared aim of becoming top ten trade partners and doubling investment.

They also welcomed the many Australian and Vietnamese corporations that were proactively pursuing investment projects in both countries.

The Ministers discussed the important contribution that Australia-Vietnam development cooperation and broader economic partnership had made to supporting Vietnam’s reform agenda and economic growth, particularly in light of the global economic downturn caused by the COVID-19 pandemic.

They noted the success of the Partnerships for Recovery Vietnam COVID-19 Development Response Plan in supporting a healthy, cohesive and resilient Vietnam, which includes Australia’s commitment to share approximately 5.2 million COVID-19 vaccine doses with Vietnam, of which over 700,000 have already been delivered.

On the occasion, the two ministers announced the appointment of Business Champions to promote further two-way trade and investment links. The Business Champions are industry leaders who will promote trade and investment opportunities to business communities in Vietnam and Australia. These are honorary positions appointed for an initial one-year term.
 
The Business Champions are  TH Group, Vietcombank , and Hoa Phat Group of Vietnam, and Aurecon Corporation, RMIT University and SunRice Group of Australia.

As of the end of August, Australia is the 10th largest trading partner, 18th export market and 8th largest import market of Vietnam.

In terms of investment cooperation, Australia ranks 19th out of 141 countries and territories having investment projects in Vietnam. The country is one of the largest non-refundable official development assistance (ODA) partners for Vietnam./.

Thai Binh works to clear hurdles for enterprises

The authorities in the northern province of Thai Binh have stepped up work in investment attraction and easing obstacles for firms in a practical and effective manner.

As heard at a meeting of the provincial People’s Committee on the socio-economic situation in August and the first eight months of the year, in August, despite complicated developments of COVID-19, under the authorities’ drastic direction, the local people’s health and safety were ensured, while stable economic development was sustained.

Thai Binh’s August industrial production value increased by 1.8 percent compared to July and increased by 35.9 percent on-year. The value amounted to over 48.6 trillion VND (2.13 billion USD) during January – August, up 13.6 percent annually.

Also in the eight-month period, the province’s total budget revenue was estimated at 14,287 billion VND, equaling 97.6 percent of the plan for the period, and growing 8.6 percent over the same period last year.

By August 20, Thai Binh had approved and adjusted investment policies for 49 projects, with their freshly and additionally registered capital exceeding 10.3 billion VND.

Nguyen Khac Than, Vice Secretary of the provincial Party Committee and Chairman of the provincial People’s Committee, has requested all-level competent agencies and sectors to focus on COVID-19 prevention and control, direct agricultural production, and conduct measures for natural disasters prevention and control.

Attracting investment, tackling difficulties for enterprises, and speeding up the disbursement of public investment and the building of a medium-term public investment plan and a public investment plan for 2022 are also necessary, the official added./.

Winners of Top 10 Vietnam ICT Companies awards account for 61 percent of the country’s ICT sector

The 76 information, communication and technology (ICT) firms honoured in the TOP 10 Vietnam ICT Companies 2021 have total revenue of 186.6 trillion VND (8 billion USD), accounting for nearly 61 percent of the whole industry’s.

The information was revealed at a ceremony to honour the firms held in Hanoi on October 9. Launched by the Vietnam Software and IT Services Association (VINASA) in April, the awards received 194 nominations in 18 sectors from 167 businesses, increasing 14 percent and 67 percent in terms of the number of nominations and businesses respectively over last year.

Statistics from the organisation board showed that more than 90 percent of participating firms have been implementing research and applying new technology in the development of new products and solutions.

Speaking at the awards ceremony, Deputy Minister of the Information and Communications (MIC) Pham Duc Long said: “Vietnamese IT enterprises have made great contributions to the prevention of the COVID-19 pandemic by quickly building and deploying many digital technology platforms and solutions, ensuring smooth communication, helping tens of millions of officials, employees, students, agencies, organisations, businesses, schools as well as people across the country maintain daily operations.”

The MIC highly valued big contributions from the IT business community and expects the TOP 10 leading ICT firms in Vietnam in 2021 would continue to enhance their pioneering role in making Vietnam a digital country with rapid and sustainable development, he added.

The awards this year still saw the participation of the country’s big IT firms such as Viettel, VNPT, MobiFone and FPT.

The Top 10 IT companies with impressive growth were announced for the first time to honour firms with high growth rates. Most of the companies have been providing ICT services to international markets. They have been flexible in finding growth opportunities despite difficulties caused by COVID-19.

Launched in 2014, the Top 10 ICT award aims to honour businesses with big contribution to the country’s ICT industry./.

HCM City starts tourism recovery scheme by tours to “green areas”

Ho Chi Minh City’s Department of Tourism is coordinating with travel firms and relevant agencies to further expand the pilot organisation of tours to local historical sites with participants being people working on the frontline of the fight against the COVID-19 pandemic in the city.

It also plans to open tours to “green areas” in an effort to gradually resume tourism activities in the locality. 

On September 30, Saigon Tourism Corporation (Saigontourist) organised a trip for more than 150 medical workers who are joining COVID-19 prevention activities in District 6, to visit Cu Chi Tunnel, an underground base of residents and revolutionary army during the anti-America war, in Cu Chi district, 70km north-west of HCM City. 

The tour was organized in accordance with a closed model, in which tourists’ activities were kept within outdoor areas around Cu Chi Tunnel. 

General Director of Saigontourist Nguyen Huu Y Yen underlined the importance to have safe destinations and “green areas” before resuming tourism activities.

Regarding a roadmap to revive the tourism market, Director of the municipal Department of Tourism Nguyen Thi Anh Hoa said the local tourism sector plans to step by step resume tourism activities in a sustainable direction in the remaining months of 2021 and early 2022, focusing on ensuring safety for tourists and labourers working in the sector./. 

Efforts made to protect interests of Vietnamese products in EU market

Vietnam has taken various measures in a bid to protect the interest of Vietnamese products and exporters in the EU markets, according to the Trade Remedies Authority of Vietnam under the Ministry of Industry and Trade (MoIT).

According to the authority, so far, the EU has launched 14 trade defence investigations on products imported from Vietnam, including six regarding anti-dumping allegations, one on anti-subsidy, six on tax evasion and one self-defence. Products involving in the investigations are diverse, including footwear, steel products, fluorescent lamps, metal rings, and gas lighters.

Notably, since 2018, the EU has not launched any new investigations on Vietnamese products but only reviewed previous cases. Among the EU markets, Turkey is the country with the largest numbers of trade defence investigation and remedies on Vietnamese products.

In order to realise commitments stated in the EU-Vietnam Free Trade Agreement (EVFTA), the MoIT has issued Circular No. 30/2020/TT-BCT guiding the implementation of contents related to trade defence in the deal. It includes regulations on the application of bilateral defence measures in case products imported from EU member countries increase abnormally due to tax reduction following the EVFTA, causing losses to domestic industries.

Meanwhile, the ministry has strengthened the operation of the early alerting system on trade remedies, while giving solutions and consultations to production and exporting businesses to avoid trade defence investigations.

Le Trieu Dung, head of the Trade Remedies Authority of Vietnam, said in order to protect the interest of Vietnamese exporters, along with giving early warning on the EU-launched trade defence investigations, the ministry has continued to complete the legal system, institutions  in the field and the trade defence system.

Alongside, the MoIT will continue effectively conducting a project on build and operate the trade remedy warning system and a master plan on responding to trade defence measures. The ministry will also increase awareness campaigns among the business community on trade remedies to protect their interest in the EU market./.

Vietnam is Russia’s sixth largest supplier of processed fruits, vegetables

Vietnam is the sixth largest provider of processed fruits and vegetables for Russia, according to the Federal Customs Service of Russia.

However, the Southeast Asian nation’s shipments accounted for only 5 percent of Russia’s total imports, it said.

In the first 7 months of this year, Vietnam’s processed vegetables and fruits imported to Russia reached 30,000 tonnes, valued more than 30 million USD, up 13.8 percent in volume and 51.2 percent in value.

The value of processed vegetables and fruits imported from Vietnam to Russia rose sharply and had a much higher increase pace than the growth in volume thanks to a surge in import prices.

In the 7-month period, the average import price of processed fruits and vegetables from Vietnam to Russia was 1,011.2 USD per tonne, up 32.8 percent over the same period in 2020.

According to the Department of Imports and Exports under the Ministry of Industry and Trade, Vietnam is the first partner to sign the Free Trade Agreement with the Eurasian Economic Union. Under this agreement, nearly 90 percent of tariff lines are cut or reduced, of which 59,3 percent are removed.

This is a good opportunity for Vietnamese exports, including processed fruits and vegetables, which are Vietnam’s strong products shipped to Russia./.

Domestic petrol prices to reach new highs on global market rally

Retail petrol prices in Vietnam are likely to reach new highs when the Ministry of Finance and the Ministry of Industry and Trade announce their price adjustments on October 11.

Data from the Ministry of Industry and Trade show the average prices of RON 92 and RON 95 in the Singaporean market rose considerably to US$86.61 and US$88.20 USD/barrel, respectively during the past week. Sometime the prices of both petrol types spiked to nearly US$88 and US$90 barrel mark.

Petrol retailers predicted that domestic petrol prices would rise VND700-800 per litre on October 11 when the Ministry of Finance and the Ministry of Industry and Trade announce their price adjustments.

Half a month ago, the two ministries decided to raise domestic retail prices of petrol by more than VND500 to nearly VND22,000 per litre, hitting a three-year high.

At a regular Government press briefing for September, Le Viet Nga, an official of the Ministry of Industry and Trade said the global economy is recovering from the COVID-19 pandemic, fuelling petrol prices. Given the global market rally, she said a fall in petrol prices is unlikely.

“We will coordinate closely with the Ministry of Finance and other agencies to manage petrol prices to better serve the economy, and support businesses and people,” she said.

Value of footwear exports sees sharp drop amid pandemic

In September, the export value of footwear reduced 44% on-year to $700 million, according to the Vietnam Leather, Footwear and Handbag Association (LEFASO).

The total export turnover of the leather, footwear, and handbag sector in September reduced by 24% on-year, contributed by a 48% decrease in handbag exports.

However, thanks to the growth in the first half, the export turnover in the first nine months still reported positive growth. Accordingly, footwear exports reached US$13.3 billion (up 10% on-year) while handbags reached US$2.24 billion (down 3.7%).

The US is still the largest export destination of Vietnamese footwear and handbags, capturing 41% and 44%, respectively. The EU ranks second with footwear and handbags market share of 23% and 22%, respectively.

According to LEFASO, footwear and handbag exports in the past months have declined significantly due to the pandemic outbreak since May. Thereby, 80 per cent of factories in the south (especially in Ho Chi Minh City, Dong Nai, Binh Duong, Long An, Tien Giang), where a lot of footwear producers are based, had to shut down due to social distancing rules. These companies account for 70% of the total export turnover of the sector.

In Central and North Vietnam, footwear producers are running at 50%-80% capacity and are experiencing a shortage of human resources, as well as incurring more costs like the increase of materials, transport, testing COVID-19, camping at work.

Moreover, LEFASO also highlighted the lack of empty containers and international logistics and shipping costs increasing by 5-10 times since 2020. The high price of imported fuel and raw materials has greatly affected production, causing many difficulties for exporters.

The association said that they cannot enjoy the support policies of the government for enterprises hit by COVID-19, saying the conditions for accessing assistance are too tight and administrative procedures are too complicated.

Since the end of September, social distancing restrictions in numerous localities have been relaxed. However, it will take few months for them to recover operation in the new normal living with the coronavirus.

Like other labour-intensive sectors (textile and garment, seafood processing), footwear producers are struggling with the serious shortage of workers, because thousands of workers have left factories to return to their hometowns.

Therefore, LEFASO recommended businesses to save costs, further utilise government assistance, and call employees back to work while complying with regulations on disease safety under the guidance of the Ministry of Health, as well as take advantages of the free trade agreements (CPTPP and EVFTA) to enhance export volumes in the last months of the year.

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

Source: https://vietnamnet.vn/en/business/vietnam-business-news-october-11-782044.html

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Magnetic strip ATM cards to remain valid next year

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A customer uses a chip card for payment at a point-of-sale (POS). VNA/ Photo

HÀ NỘI — The State Bank of Vietnam (SBV) this week issued a dispatch, noting that domestic automated teller machine (ATM) cards with magnetic strips will remain valid for normal use after December 31, 2021.

The dispatch was issued after some banks have recently started sending notices to their customers about stopping supporting cards from ATMs to meet the deadline of the SBV’s Circular 19/2016 on the roadmap to convert from issuing magnetic strip cards to chip cards from next year.

Under the new dispatch, the SBV clarified that Circular 19/2016 makes no mention of a suspension of transactions using magnetic strip cards that remain valid.

December 31 this year is the deadline for changing to chip cards, not the date that magnetic strip cards will become invalid, the SBV noted, adding customers can continue to use magnetic strip ATM cards for transactions at ATMs, point-of-sale (POS) and bank counters, and for internet and mobile banking services after December 31 this year.

Under the new dispatch, the SBV asked card issuers and card payment organisations to ensure card holders’ transactions are carried out smoothly, safely and do not affect the interests of cardholders. They were also asked not to issue policies and regulations that go against the law on bank card operations.

In addition, they were told to launch media campaigns to inform their customers that magnetic stripe cards can still be used after December 31 this year.

However, under the new dispatch, the SBV also asked card issuers to encourage and support their customers to convert magnetic cards to chip cards to enhance security and to warn them of the risks if magnetic cards continue to be used.

There are two common ways to convert magnetic cards to chip cards.

In the first way, customers only need to bring valid citizen ID card or passport to the bank’s transaction point and request to convert from magnetic card to chip card.

In the second way, customers can access digital banking applications and mobile banking to apply for and receive cards at home or at the bank’s transaction points.

Or at some banks, the process is even more convenient. For example, at TPBank, customers can exchange magnetic cards for chip cards at LiveBank 24/7 and receive cards in just a few minutes.

In order to encourage customers to change magnetic strip cards to chip cards, most banks offered this service free of charge and the change is still free at some banks.

For example, at NamABank, the bank will completely convert magnetic strip cards to VIP cards for free from now until December 31, 2021. Similarly, Techcombank is also offering this activity free of charge.

According to experts, the conversion of magnetic strip cards to chip cards is beneficial for users, contributing to improving the security level, transaction speed, safety and ensuring the interests of customers.

Specifically, a magnetic card is a card containing a magnetic strip storing customer’s encrypted information. The data is permanently stored on the magnetic strip and is encrypted only once, so it easily leads to the risk of card information theft and transaction fraud.

Meanwhile, chip cards, which are also known as “smart cards”, have a microchip attached to the surface of the card, and this is the basic difference between chip cards and magnetic strip cards. For chip cards, transaction data includes data stored on the chip and the transaction password that changes with each transaction. Specifically, every time a chip card is used for payment, the chip will generate a unique transaction code and never repeat. In case the customer’s card is stolen from a certain store, the fake card will never work because the stolen transaction code will not be reused, the card will be rejected. —      


 

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Source: https://vietnamnews.vn/economy/1092063/magnetic-strip-atm-cards-to-remain-valid-next-year.html

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Exporters told to strictly comply with EU regulations to avoid losses

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The European Union has a large demand for imported agricultural products and, thanks to the EU-Vietnam Free Trade Agreement (EVFTA), Vietnamese businesses have a unique opportunity to take advantage of this.

 However, local businesses need to strictly comply with European regulations to avoid losses when exporting to the region.

Exporters told to strictly comply with EU regulations to avoid losses
The EU applies strict requirements and regulations on imported food products. — VNA/VNS Photo Vu Sinh 

For food products, the EU has strict requirements and regulations on product quality and the maximum residue level (MRL) of pesticides.

Trade counsellor Tran Ngoc Quan, head of the Vietnam Trade Office in Belgium and EU, said that most regulations across the bloc are similar when it comes to agricultural and food products.

Germany, Austria, the UK, Netherlands and Belgium do have stricter and higher MRL levels than the standard EU regulations, though these vary with different active ingredients, fresh produce and processed products.

Dang Phuc Nguyen, General Secretary of the Vietnam Fruit and Vegetable Association, said that while Vietnamese fruits and vegetables are more competitive than those from countries without a European trade agreement, exporters must focus on improving MRL levels.

Nguyen said: “If enterprises exporting to the EU do not comply with the regulations, they face the risk of increased levels of inspections, supervision and perhaps even being banned from exporting to these markets in the future.

“The EU applies these regulations very strictly. Enterprises that want to export to the EU must obtain certificates and production levels according to GlobalGAP.”

Nguyen added that violators run the risk of incurring heavy losses if they are caught.

According to the new EU regulation No 2021/1900, effective from November 23, the frequency of pesticide testing on Vietnamese herbs and fruits will increase. Of this, 50 per cent of testing will be applied to coriander, basil, mint, parsley, beans corn and pepper and 10 per cent will be applied to dragon fruit.

Nguyen said that as vegetable products in Vietnam often have pesticides, some samples and consignments will be tested for residue. The EU has also increased the frequency of testing, adding that the more enterprises violate the regulations, the more frequent inspections will be. 

He said bans on export to the EU could be applied to violators.

According to a representative of the Vietnam Pepper Association (VPA), the EU’s increase in testing will raise difficulties in exporting to the EU and will invite increased competition from other countries.

“In order to avoid violations, businesses must do better at testing products when exporting, as well as strengthening production links to create a clean and safe raw material area,” said a representative of VPA.

The EU also conducts post-inspections away from ports, so even though goods are being consumed or sold at supermarkets or shops, if they are not of good quality they can still be recalled, said Nguyen.

Using the example of a Vietnamese pepper export enterprise that was refused by Spain when its product was tested at the border gate recently, Nguyen said that if the violation was discovered when the product was already on shelves it would cause larger financial damage to the  Vietnamese exporter. 

Nguyen Minh Lien, General Director of Vinamex Company which purchases Vietnamese goods for export to the EU market, shared that some Vietnamese enterprises do not pay due attention to food safety issues. Lien added that due to the post-inspection of the EU market, some have had to pay fines and incur additional costs due to poor quality products.

In addition, Lien said some basic errors like incorrect packaging leads to products being returned or sold cheaper to other markets.

Lien noted when exporting goods to the EU, Vietnamese businesses must work closely with importers on product quality, packaging and contract inspection to avoid loss and damage.

She said supermarkets in the EU do not directly import goods from Vietnam, so local enterprises should cooperate with importers to arrange products at the warehouse before entering the retail market there.

She also suggested Vietnamese enterprises cooperate to diversify products, ensure sufficient output and take advantage of shared containers when exporting.

Considering EU customers are increasingly interested in buying products from businesses that contribute to community development and the environment, Nguyen said: “Sustainable development should be a long-term direction for export businesses in Vietnam.”

At the same time, even enterprises and manufacturers that follow the GlobalGAP requirements must pay attention to the plant protection ingredients that the EU bans or restricts, as some may be different from the GlobalGAP.

Source: Vietnam News

Source: https://vietnamnet.vn/en/business/local-exporters-must-strictly-comply-with-eu-regulations-to-avoid-losses-798131.html

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Moody’s upgrades VPBank’s rating to Ba3

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VPBank is one of the leading banks in Việt Nam. — Photo courtesy of the bank

HÀ NỘI — Global credit rating firm Moody’s Investors Services has upgraded Việt Nam Prosperity Bank (VPBank)’s foreign currency deposits from B1 to Ba3 which is equal to the country’s rating with positive outlook.

Moody’s BCA ratings reflect the independent intrinsic strength of the issuer. This credit rating is assessed based on the macro-environment, financial profile and qualitative assessment factors. In addition to upgrading the BCA rating, Moody’s also upgraded VPBank’s long-term local and foreign currency deposit ratings, rising to Ba3.

VPBank’s credit rating was announced after the bank completed the sale of a 49 per cent stake at its VPBank Finance Company Limited (FE Credit) to SMBC Consumer Finance Co Ltd (SMBCCF), a wholly-owned subsidiary of Japan’s Sumitomo Mitsui Financial Group, Inc (SMBC Group) at the end of October. Moody’s assessed that the capital sale brought about a significant improvement in the bank’s credit profile. Notably, according to Moody’s methodology, the bank’s capital adequacy ratio (CAR) increased from 11.4 per cent at the end of September 2021 to 13.5 per cent at the end of October 2021.

In addition to the improved capital base, the bank’s outstanding business results in recent months, despite the negative impact of COVID-19 on the economy, were also highly appreciated by Moody’s. The business results in the third quarter of the year showed that VPBank’s consolidated before-tax profit reached more than VNĐ11.7 trillion (US$513 million), up 24.9 per cent over the same period last year. The parent bank’s pre-tax profit alone reached VNĐ10.8 trillion, representing 75.2 per cent year-on-year increase. The bank’s total consolidated operating income reached VNĐ33.2 trillion, increasing 17.3 per cent over the corresponding period last year. Its consolidated return on assets (ROA) and return on equity (ROE) indices continued to be among the top of the market, reaching 2.8 per cent and 21.6 per cent respectively.

Moody’s believed that VPBank’s capital capacity will continue to be stable, as the bank has clearly demonstrated its plan to use capital obtained from the FE Credit deal to promote growth and seek new business investment opportunities. In addition, the assets scale will be further expanded thanks to the profit growth from business activities.

“VPBank’s asset quality and profitability will remain stable over the next 12-18 months,” Moody’s said in the announcement, emphasising the belief that VPBank’s asset quality will be well under control as Việt Nam’s economy recovers and vaccination rates increase.

The upgraded ratings from a prestigious international credit rating agency like Moody’s in the context that Việt Nam’s economy has suffered heavy impacts from the outbreak of the COVID-19 pandemic, has demonstrated confidence of international organisations in VPBank’s capital base and development plan this year and in the future. This also contributes to strengthening VPBank’s position, while further enhancing its ability to mobilise capital from reputable financial institutions. —

Source: https://vietnamnews.vn/economy/1092062/moodys-upgrades-vpbanks-rating-to-ba3.html

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