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Vietnamese garment and footwear surviving during the coronavirus

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The Vietnamese garment factories are persuading international brands to use domestic fabrics and raw materials.

As the Covid-19 outbreak affected Vietnam’s textile and garment and footwear industries this year, many businesses have changed their strategy of product development and on seeking new customers, especially enhancing connection with each other within the sector.

Vietnamese garment and footwear surviving during the coronavirus
Thuong Dinh Footwear JSC. Photo: Nam Le/ Hanoitimes 

Ms. Do Quynh Chi, Director of the Research Center for Labor Relations, said at a conference held on December 11, during and after the Covid-19 pandemic, the businesses strengthened their connections with each other in purchase and sale of domestic materials to offset supply disruption or price hike. Not only sharing orders, enterprises in the sector are sharing experiences about technology, machinery, implementation of environmental standards (such as wastewater treatment, using solar energy) and other issues.

In addition to the impact on the supply of raw materials from Covid-19, Mr. Vu Duc Giang, Vitas Chairman, said that to meet the standards of origin, local manufacturers and international brands also increased the buying and selling of domestic raw materials. Specially, Phu Bai Spinning Company has promoted the sale of yarn to many foreign-invested enterprises in Vietnam during the pandemic.

Meanwhile, many Vietnamese garment factories have been persuading international brands to use domestic fabrics and raw materials instead of importing them completely as previously to take advantage of tariff incentives through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam free trade agreement (EVFTA).

A recent survey conducted by the Research Center for Labor Relations showed that 46.6% of businesses have dealt with their peers  and the 39.5% planned to cooperate with others in the next 1-3 years.

However, most businesses, those who want to connect with others, lack information channels and support mechanisms. For example, there is currently no web portal providing comprehensive information on the textile and footwear-handbag industries in Vietnam as well as opportunities to connect with partners.  

Potentials after Covid-19

Mr. Giang from the Vitas said that the demand of Europe and the US in 2020 was estimated to decrease by 45% and 40% for garment, 27% and 21% for footwear, respectively. Until the fourth quarter of 2020, the pandemic continued to be complicated in the two large markets, making the fashion industry’s recovery time same as pre-pandemic levels predicted at the end of 2022 or early 2023.

However, Vietnam garment and footwear industries also have many opportunities as the global trade landscape is changing. Garment exports are mainly of high value, but still their sales remain unchanged and its  market share even expanded in the US. In June 2020, Vietnam overtook for the first time China’s position as the largest exporter of apparel to the US.

In Europe, Vietnam now accounts for about 3% of the market share. With the EVFTA agreement taking effect on August 1, 2020, footwear and textiles exports are forecast to increase strongly by 2025. 

Local manufacturers have adjusted some strategies in the next 1-3 years. Up to 55.7% of surveyed businesses planned to promote automation, the 49.8% will develop new products, the 39.9% will diversify more products and the 41.5% will invest in improving labor skills, according to the Research Center for Labor Relations’ survey.

“Nearly half of the fashion brands said they would increase their purchases from Vietnam after Covid-19, partly due to the supply chain diversification strategy and the free trade agreements that Vietnam has joined recently,” Mr. Giang said. 

“We will overcome difficulties in 2021 and 2022, even 2023. By the end of the third quarter of 2023, if Covid-19 is under control, the textile-garment industry will grow at the same level  as that of 2019,” he added.

This year, textile and garment exports are expected to reach US$35.2 billion, lower than the $38.9 billion last year, and $55 billion for the 2025 goal, according to the Vitas.

To promote the development of the textile and footwear industry in the coming time, insiders have said that businesses need to continue improving their compliance with labor and environmental standards according to new-generation agreements such as CPTPP and EVFTA, participating directly and deeply in the supply chain with their own sources of raw materials, and taking a higher position in the value chain. 

Covid-19 had a negative impact on textile and footwear enterprises in 2020. Specially, 94.2% and 87.1% of enterprises in leather-footwear, textile and garment, respectively reduced orders. Meanwhile, 84.5% and 53.5% of leather-footwear, textile businesses were delayed their orders; 74.8% and 22.9% leather-footwear, textile businesses could not export. 

Ms. Chi from the research center said that in short and medium term, the trend of diversifying customers, markets and products is the lifesaver for textile enterprises to maintain their operations. Meanwhile, leather and footwear manufacturers tend to reduce outsourcing and diversify customers.

“In the long term, green technology and automation continue to be the trend,” Chi said.  Hanoitimes 

Nhat Minh

Source: https://vietnamnet.vn/en/business/vietnamese-garment-and-footwear-surviving-during-the-coronavirus-697440.html

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Retired deputy minister becomes bank president

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VietBank’s president has unexpectedly resigned and his position has been transferred to a former government official.

Retired deputy minister becomes bank president

VietBank’s chair of the board of directors Bui Xuan Khu

VietBank has announced that Duong Ngoc Hoa resigned from the post of chair of the board of directors on February 23 and the office has been taken by Bui Xuan Khu, who was Deputy Minister of Industry Trade.

Khu became a member of the bank’s board of directors in 2011 after he retired. Later, he acted as deputy chair of the board of directors until he was appointed president of the bank.

Khu is the next former high-ranking official to become a bank president. Le Thi Bang Tam, former Deputy Minister of Finance, is now president of HDBank and president of Vinamilk.

Tam joined Vinamilk in 2013 as an independent member of the board of directors. She has been president of the nation’s leading dairy producer since 2015 and president of HDBank since 2010. She is also a senior advisor to some foreign financial institutions.

A lot of former government officials became businessmen after their retirement. Tran Xuan Gia, former Minister of Planning and Investment Tran Xuan Gia, became the president of ACB in 2008-2012. Gia, together with a lot of former senior managers of the bank, including Ly Xuan Hai, Le Vu Ky and Trinh Kim Quang, were investigated in a case related to Nguyen Duc Kien, or ‘Mogul Kien’.

Kieu Huu Dung, former director of the Banks and Non-bank Credit Institutions Department, served as president of Sacombank in 2014-2017. He later became president of ACB Securities and president of Sacombank Securities.

The other officials included Pham Viet Muon, who was Vice Chairman of the Government Office, Cao Sy Kiem, former Governor of the State Bank of Vietnam (SBV) and Truong Van Phuoc, former head of SBV’s Foreign Exchange Management Department.

Former Deputy Minister Bui Xuan Khu, who joined VietBank in 2011, also has a lot of business experience as he was general director of the Vietnam Textile and Garment Corporation (Vinatex), the largest garment producer in Vietnam, general director of Viet Tien Garment and deputy president of the Global Petroleum Investment JSC.

In mid-2019, VietBank put VBB shares into transactions on the bourse.

VietBank was established in December 2006 as a rural bank with charter capital of VND200 billion. Its founding shareholders have relations with Hoa Lam Group, ACB and Dieu Hien Company. The bank now has charter capital of VND4.19 trillion after five capital increases.

ACB has divested from VietBank, while Dieu Hien is no longer mentioned in documents and information about the bank. The shareholders from Hoa Lam Group still maintain their stake with Duong Ngoc Hoa as the representative. Duong Nhat Nguyen is now deputy chair of the bank. 

V. Ha

Source: https://vietnamnet.vn/en/business/retired-deputy-minister-becomes-bank-president-715484.html

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Shares recover on the back of banking and energy stocks

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A customer at a branch of Military Bank (MBB). Shares of MBB rose 1.1 per cent on Thursday. Photo courtesy of MBB

HÀ NỘI — Shares bounced back on Thursday on the back of large-caps, banking and energy stocks.

The benchmark VN-Index on the Hồ Chí Minh Stock Exchange gained 0.29 per cent to close at 1,165.43 points.

It had lost 1.33 per cent to close Wednesday at 1,162.01 points.

More than 510.4 million shares were traded on the southern bourse, worth VNĐ13.5 trillion (US$589 million).

Market breadth was neutral with 220 gainers and 214 losers.

“The VN-Index is still in a consolidating span at the 1,160-1,200-point range,” said BIDV Securities Co.

“Liquidity declined compared to the previous session, market band was narrowed and market breadth was positive, showing that investor sentiment is stabilising.

“Foreigners continued to be net sellers on the HoSE while they were net buyers on the HNX.

“BSC recommends mid and long-term investors to open positions in some good fundamental stocks in this short-term consolidating span,” it said.

Foreign investors net sold VNĐ460.80 billion on HOSE, including dairy firm Vinamilk (VNM) (VNĐ233.40 billion), Vietnam National Petroleum Group (PLX) (VNĐ47.4 billion), and real estate company Khang Điền House (KDH) (VNĐ36.2 billion). They were net buyers on the HNX with the value of VNĐ10.44 billion.

The oil and gas sector index gained 2.4 per cent, becoming one of the best-performing sectors in Việt Nam on Thursday, data on vietstock.vn showed.

Vietnamese oil and gas stocks grew well, including PetroVietnam Gas JSC (GAS), Viet Nam National Petroleum Group (PLX), PetroVietnam Drilling & Well Services Corporation (PVD), PetroVietnam Power Corp (POW), and PetroVietnam Technical Services (PVS).

Besides the petroleum industry, financial stocks also performed well with the banking and industry indices rising 0.3 per cent and 0.3 per cent, with gainers including Vietcombank (VCB), Military Bank (MBB), HDBank (HDB), Bảo Việt Securities Co (BVS), MB Securities Co (MBS), Ho Chi Minh City Securities Corporation (HCM), Saigon-Hanoi Securities Co (SHS) and VNDirect Securities Co (VND).

The large-cap tracker VN30-Index gained 0.23 per cent to stay at 1,169.82 points.

Fourteen of the 30 large-cap stocks in the VN30 basket increased while thirteen lost ground.

On the Hà Nội Stock Exchange, the HNX-Index rallied 3.49 per cent to end Thursday at 246.20 points.

The northern market index had dropped 0.38 per cent to end Wednesday at 237.89 points.

More than 115.4 million shares were traded on the northern market, worth VNĐ1.9 trillion. —

Source: https://vietnamnews.vn/economy/887216/shares-recover-on-the-back-of-banking-and-energy-stocks.html

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Number of passengers using Can Gio-Vung Tau ferry service on the rise

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A ferry carrying passengers and goods plies on the Can Gio-Vung Tau route – PHOTO: NLDO

HCMC – The ferry service linking HCMC’s outlying district of Can Gio and neighboring Vung Tau City has seen an increase in the number of passengers and goods after nearly two months of operations, prompting the service operator to consider adding more ferries to meet the rising travel demand.

Data from the Inland Waterway Port Authority for Ba Ria-Vung Tau Province showed that over 400 ferry trips carrying some 31,000 passengers had been operated on the route from January 4 to February 17, with more than 200 trips transporting 15,500 passengers during the recent Lunar New Year holiday.

Given the rising number of passengers and commodities, the operator had to add one-three more trips on the weekends.

Quoc Chanh One Member Limited Liability Company, which is the investor and operator of the ferry project, said that it planned to put four more ferries into operation from 2021 to 2022. The company expects to put 12 ferries into service in 2024.

The company operates 25 daily trips using two ferries on the route. It will take passengers around 30 minutes to travel on the 15-kilometer-long ferry route.

Source: https://english.thesaigontimes.vn/80689/number-of-passengers-using-can-gio-vung-tau-ferry-service-on-the-rise.html

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