VIETNAM BUSINESS NEWS NOVEMBER 23/2023 – VietNamNet

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Sugar could become more expensive in the remaining months of 2023, according to the Vietnam Sugarcane and Sugar Association (VSSA).


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Data from the Vietnam Commodity Exchange (MXV) showed global sugar prices had reached 161 USD per tonne in early November, a 150% increase compared to the beginning of the year, marking the highest price in the last 12 years.

Industry experts said a decrease in supply as India and Thailand, two of the largest producers, lowered their output was the main factor behind recent price hikes.

Thanh Thanh Cong-Bien Hoa JSC, a major sugar producer in Vietnam with a 46% market share, said the company’s revenue increased to 5.9 trillion VND (245.8 million USD) in the first three quarters of 2023, a nearly 20% increase compared to the same period in the previous year, fetching 663 billion VND in pre-tax profit.

After-tax profit, however, plummeted by 17% as the company struggled with high interest rates, paying out over 444 billion VND on interest payments, almost double the amount recorded in 2022.

Lam Son Sugar reported its highest growth, 471 billion VND in revenue and 17 billion VND in profit, a 55% and 113% increase, respectively compared to the same period in 2022. In an earlier development, Lam Son Sugar announced a plan to import 40,000 tonnes of raw sugar this year, as part of an effort to meet their annual target.

Son La Sugar also reported strong growth with a revenue of 431 billion VND and profit of 119 billion VND, an increase of 26% and 47% respectively, compared to the period last year. An effort to reduce financial costs by Son La Sugar has yielded stronger profits and was on its way to meeting this year’s fiscal target.

Quang Ngai Sugar reported an after-tax profit of 506 billion VND for the third quarter of 2023, a 60% increase compared to the same period last year but slightly lower than their performance during the first and second quarters of 2023.

In total, Quang Ngai Sugar reported a total revenue of 7.74 trillion VND in the first nine months of the year, an increase of 23% compared to the same period last year, with sugar being the strongest growth driver for the company, fetching 3.12 trillion VND in revenue and 1.26 trillion VND in gross profit.

With just a few months left before the end of 2023, the price of sugar will likely increase due to higher demand, typically seen towards the Tet (Lunar New Year) Holiday. Meanwhile, inventory has been running low for some time, prompting experts to anticipate difficulties on the supplier’s side in the domestic market.

They advised sugar producers to capitalise on high prices to strengthen domestic sugarcane production and rely less on imports.

Vietnam Foodexpo 2023 opens in HCM City

Vietnam Foodexpo 2023 opened at the Saigon Exhibition and Convention Centre (SECC) in Ho Chi Minh City on November 22.

The four-day event features more than 500 booths of nearly 400 domestic and international enterprises, including businesses from 30 Vietnamese cities and provinces and more than 20 countries and territories such as the US, Russia, Australia, China, the Republic of Korea, Japan.

On display are a wide range of agricultural products, aquatic products, processed foodstuff and beverages, as well as food processing, preservation and packaging technologies and equipment, among others.

Organic food production and processing are an inevitable trend of the Vietnamese food industry, therefore the event has gathered many local and foreign organic brands with high quality products, meeting the needs and trends of healthy living in the country.

The event is also an opportunity to connect Vietnamese enterprises with partners, boost trade and investment promotion, and develop the food industry.

A highlight of the event is the presence of booths from the Biotrade project with the theme ” Biodiversity: Where flavors harmonise”. More than 20 small and medium-sized enterprises (SMEs) from Vietnam, Laos, Myanmar and Cambodia have introduced more than 200 items such as spices, seeds (peanuts, beans, sesame), rice, coconut, palmyra, tea, coffee which are cultivated and produced according to international standards.

Can Tho city, Canada strengthen cooperation

Vice Chairman of the People’s Committee of Can Tho city Nguyen Thuc Hien on November 22 received a delegation of the Consulate General of Canada in Ho Chi Minh City led by Consul General Annie Dubé.

The municipal official informed the guests of the city’s socio-economic development and its development orientations to 2030 with a vision to 2045.

In the first nine months of this year, the export turnover of goods from the city to Canada reached 4.18 million USD with main exports of rice, aquaculture products, garments, agricultural products processed agricultural products, steel and steel products.

Hien said Can Tho city hopes to join in the strengthening of the relationship between Vietnam and Canada in the coming time and wishes the Consulate General of Canada in Ho Chi Minh City will create favourable conditions for the city to establish relationships and cooperate with Canadian partners and organisations to develop areas such as trade, services, and processing industry.

For her part, the Canadian diplomat said Vietnam is Canada’s top trading partner in ASEAN, adding Canada will export many goods to Vietnam in the time to come.

Canada has supported projects consistent with Vietnam’s priority areas such as climate change and environmental protection, she said and highlighted that Canada also prioritises support for gender equality and empowerment of girls

The same day, the diplomat and leaders of Can Tho city planted trees at a local park on the occasion of the 50th anniversary of the diplomatic relations between Vietnam and Canada.

Vietnamese businesses see potential to penetrate Canadian market: workshop

A workshop spotlighting Canada as a gateway for Vietnamese businesses to access the North American market took place in Ho Chi Minh City on November 22, aiming to provide the latest information, consumer trends, and export incentive policies for Vietnamese businesses to deepen their participation in the Canadian market.

Canada is Vietnam’s second-largest trading partner in the Americas after the US. According to data from the General Department of Vietnam Customs, trade between Vietnam and Canada reached over 5.2 billion USD in the first 10 months of 2023, down 16.3% year-on-year.

Addressing the event, co-organised by the Ho Chi Minh City Investment and Trade Promotion Centre (ITPC) and Vietnamese Canadian Business Association (VCBA), Vice Chairman of the HCM City People’s Committee Vo Van Hoan said that the figure is modest compared to the potential boasted by the two countries. Vietnam also plays a role as a gateway for Canada to Southeast Asia and the Asia-Pacific region, he noted.

Consul General of Vietnam in Canada’s Vancouver Nguyen Quang Trung said that despite their geographical distance, the sides’ bilateral cooperation has developed strongly and comprehensively across various sectors. Both are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and are currently initiating negotiations for the ASEAN-Canada Free Trade Agreement this year.

According to the diplomat, Vietnam and Canada have significant potential to expand multi-sectoral collaboration from trade to investment. Canadian investors are particularly interested in such areas as education, infrastructure, financial investment, and clean energy in Vietnam.

Pham Hong Hai, Vice Chairman of the Thien Viet securities company and former national director for HSBC Canada, stressed that establishing a business presence in Canada helps Vietnamese enterprises access the market and achieve a larger goal of developing global export markets and promoting their brand internationally.

In particular, businesses looking to access the US market should prioritise opening branches or offices in Canada, as selling products through Canada to the US is considered an export activity and can receive various forms of support.

Hai also listed several sectors with great potential for Vietnamese firms in Canada, including import-export, investment, commercial and industrial real estate, agriculture and farming, food processing, beverages, construction, as well as healthcare and pharmaceuticals.

Luxury cruise ship brings 2,700 international tourists to Vietnam

Saigontourist Travel Service Company (Saigontourist) welcomed the Malta-flagged Celebrity Solstice on November 22, with the vessel carrying 2,700 foreign passengers onboard.The cruise ship docked at Phu My Port in the southern province of Ba Ria-Vung Tau, with the locality being home to the popular beach city of Vung Tau, with the majority of passengers onboard hailing from the United States, Canada, and the UK.

Upon arrival, the foreign guests were taken to the most popular tourist attractions in Ho Chi Minh City and throughout the southwestern region.

This comes after the ship brought the holidaymakers to visit Ha Long on November 18, before then departing for Hue and Nha Trang on November 19 and November 20. Celebrity Solstice is the lead ship of the Solstice class of cruise ships operated by Celebrity Cruises. 

The vessel stretches for 314.86 metres in length, boasts a capacity of 2,852 passengers, and is rated as one of the most modern ships in the world.

On November 10, Celebrity Solstice cruise ship arrived at the Phu My port in Ba Ria-Vung Tau province with boast 2,700 international passengers onboard.

The visitors were then set to spend time on a five-day tour to various sightseeing destinations across the country until November 13. On November 26, the cruise ship Celebrity Millennium is scheduled to reach a port in Thua Thien-Hue province with about 2,100 passengers from the US, Canada, the UK, and Australia onboard.

Saigontourist also plans to continue receiving multiple international cruise ships from major firms such as Silversea Cruises and Crystal Cruises during the final months of the year.

Thanh Hoa ready to welcome Japanese investors

An investment, trade and tourism promotion conference to boost cooperation between the north-central province of Thanh Hoa and Japan opened in Tokyo on November 22.

Co-organised by a high-level working delegation of Thanh Hoa province, the Vietnamese Embassy in Japan, the Japan External Trade Organisation (JETRO) and the ASEAN – Japan Centre, the event is part of a series to mark the 50th anniversary of the establishment of diplomatic relations between Vietnam and Japan.

Addressing the event, Secretary of the Thanh Hoa provincial Party Committee Do Trong Hung said that in the province’s development plan during 2021-2030 with a vision to 2045, Thanh Hoa aims to become a new growth hub, together with Hanoi, Hai Phong, and Quang Ninh.

He emphasised that the province highly values the prestige, role and importance of foreign investors, especially those from Japan. Currently, the province has set up a Japanese support department (JAPAN DESK) and it is perfecting the Vietnam-Japan Friendship Association in the province in order to strengthen investment, trade and tourism promotion between the two sides.

The official affirmed that Thanh Hoa always welcomes Japanese investors with not only many incentives but also specific efforts such as improving transportation infrastructure, human resources quality, administrative procedures as well as quality of services.

Ambassador Pham Quang Hieu expressed his hope that through the event, Japanese investors will have a better understanding of the investment and business environment in Thanh Hoa.

On the occasion, the delegation also paid a courtesy visit to Nikai Toshihiro, former General Secretary of the Liberal Democratic Party (LDP) of Japan and Chairman of the Japan-Vietnam Parliamentary Friendship Alliance, and had working sessions with the JETRO leadership and representatives of large enterprises investing in Thanh Hoa province such as Sumitomo Group and Idemitsu Group.

Hung and Niigata Hanazumi Governor Hideyo signed a Memorandum of Understanding between the two localities on a bilateral cooperation and development plan in the medium and long term./

Dollar devalues against đồng, dropping below VNĐ24,000 threshold

The State Bank of Việt Nam (SBV)’s central exchange rate of the Vietnamese đồng against the US dollar has cooled down and dropped below the VNĐ24,000 mark in the context of a decline of the dollar index in the international market.

The devaluation of the dollar against the đồng will help reduce pressure on domestic interest rates.

The reference exchange rate closed last week at VNĐ23,972 per dollar, down VNĐ42 compared to the previous week. Over the past two weeks, the rate decreased by about VNĐ112.

Compared to the October peak at VNĐ24,110 per dollar, the rate currently cools down by about 0.5 per cent.

The SBV on Monday continued to adjust down the rate by VNĐ18 to VNĐ23,954 per dollar.

Similarly, the dollar price listed at commercial banks has also continuously gone down in recent days. Currently, Vietcombank is trading the greenback at VNĐ24,070 for buying and VNĐ24,415 for selling, down VNĐ55 per dollar.

The price at BIDV is VNĐ24,100 for buying and VNĐ24,400 for selling.

Compared to a month ago, the dollar price at commercial banks has decreased by about VNĐ300, equivalent to a decrease of about 1.2 per cent.

However, if calculated from the peak in recent months when the dollar price at commercial banks exceeded VNĐ25,000 per dollar, the banks’ exchange rate has cooled down by up to 2.4 per cent.

On the international market, the dollar index (DXY) has also dropped sharply from 106.95 points to 103.68 points, equivalent to a decrease of about 3.1 per cent compared to a month earlier.

According to Đinh Quang Hinh, head of VNDirect Securities Company’s Macro and Market Strategy Division, domestic exchange rate pressure has cooled significantly in the context that the market believes the US Federal Reserve (Fed) will stop increasing its policy interest rates.

Cooling exchange rates have allowed the SBV’s monetary policy to ease.

In fact, in the last six auctions, the SBV completely ceased bill issue despite the maturity of a large amount of bills. It meant the SBV net injected a large amount of cash back into the market. Since the beginning of November 2023, the SBV has net injected more than VNĐ108 trillion and reduced the amount of bills in circulation to nearly VNĐ100 trillion.

The SBV’s move has helped make the banking system’s liquidity more abundant and interbank interest rates have reduced sharply. Therefore, concerns about the risk of a reversal in domestic monetary policy have been removed, according to Hinh. 

Intel confirms planned chip operation expansion in Việt Nam

Intel has confirmed they will be moving forward with their plans to expand investment in Việt Nam, which is expected to reach US$1 billion.

The move aims to enhance Intel’s existing $1.5 billion factory in the Southeast Asian electronics manufacturing hub.

Speaking at the Vietnam-US Trade Forum on Tuesday, Ace Wilson, the chief financial officer of Intel Vietnam, said Việt Nam continues to be a critical part of its global manufacturing operations as demand for semiconductors grows.

The company aims to diversify its factory strategy across multiple countries, and it has set a target of $10-11 billion in export turnover for the current year, he said.

About 70 per cent of chip production that supports the region is expected to come from the Vietnamese factory, he added.

In June, Intel decided to invest in a production plant in Germany with a total investment capital of about $33 billion as part of its efforts to expand semiconductor production in Europe.

Daniel Nguyen, vice chairman of the Economic Development and Small Business Committee and Member of the Semiconductor Committee of the Oregon House of Representatives, said Việt Nam has great potential for semiconductor industry development.

The US has allocated $240 million to support the semiconductor industry, with a particular focus on aiding US businesses investing in this field in Việt Nam, he added.

In response to rumours about Intel shelving its planned investment in Việt Nam, a representative of the company clarified that there was misinformation from the media.

“Intel is still committed to further expanding its investment in Việt Nam,” the representative said.

Việt Nam is home to Intel’s largest factory worldwide for assembling, packaging, and testing chips.

The Southeast Asian nation has been banking on Intel to further expand its investment in the country, especially after the US President announced deals to support its chips industry during a visit in September.

Speaking at the forum, Deputy Minister of Industry and Trade Đỗ Thắng Hải highlighted Việt Nam’s consistent policy of regarding the US as one of the most important partners of Việt Nam.

“Việt Nam is positioning itself well to become a major manufacturing hub in the world,” Hải said.

Barbara Weisel, an expert in international trade law and former assistant to the US Trade Representative, said in recent years, the Vietnamese market has been growing strongly and stably.

Its young, educated, and entrepreneurial workforce and its network of free trade agreements have turned the country into a leading beneficiary from the interest of many countries and companies in supply chain diversification to guarantee better resilience and economic security, she said.

Thanks to the shift of supply chains and other factors, Việt Nam has recorded the biggest market share expansion in the US compared to others.

The US has become the largest import market of Việt Nam, accounting for nearly one-third of the latter’s exports.

US businesses from many sectors are heading towards the dynamic Southeast Asian market while an increasing number of Vietnamese firms, including electric vehicle producers, have also seen investment opportunities in the US, according to Weisel.

Experts recommended the two countries actively work together to build concrete and detailed action plans to enhance the resilience and competitiveness of the fields that both prioritise.

They also need to act quickly to generate economic benefits as global businesses are paying attention to new investments in the region and seeking to diversify supply chains. 

A Vietnamese firm develops blockchain technology products in Cambodia 

Việt Nam’s Unicorn Ultra (U2U) ecosystem, an All-In-One platform for potential builders, has opened its representative office in Cambodia to introduce, build and develop products applying blockchain, artificial intelligence (AI), and Big Data. 

Speaking at the event on Monday, Trần Đức Vinh, co-founder of Unicorn Ultra, described the opening of the office as a milestone to mark U2U’s presence and commitment to customers and partners in Cambodia and the region. 

Vinh said that in the future, U2U would make greater efforts to bring creative ideas, quality products and services on the blockchain technology platform. U2U’s ecosystem was taking the next steps to bring blockchain to practical life.

He said that 30 countries had been accompanying U2U to date.

Unicorn Ultra is a Layer-1 blockchain platform designed based on the venture builder model that enables creators and developers to build any potential projects to serve a decentralised future.

Under the direction of a decentralised council, U2U seeks to leverage community power to create global blockchain unicorns.

Dong Nai prepares to upgrade Bien Hoa airport

A steering board will canvas opinions for the provincial people’s committee on completing investment procedures for the project, including military land transfer procedures. 

The board is also tasked with proposing traffic measures to help connect the airport. It will also help evaluate the implementation of local authority directives regarding airport construction. It is also responsible for promptly addressing challenges and obstacles encountered during the project implementation process.

Earlier in June 2023, Deputy Prime Minister Tran Hong Ha signed a decision to approve the national airport development planning for the 2021-2030 period and a vision until 2050. The planning includes the upgrade of Bien Hoa Airport and Thanh Son Airport in Ninh Thuan.

Once upgraded, Bien Hoa Airport’s annual capacity will reach 10 million passengers by 2050.

German investors continue to bet on the Vietnamese market

Vietnam has emerged as a potential investment destination for German companies, who are increasing their presence in the country.
 
On November 21, the results of the AHK World Business Outlook Fall 2023 survey were unveiled, providing valuable insights into the perspectives of German investors around the world and in Vietnam. The survey, conducted from September 25 to October 20, focused on assessing the business situation, expectations, investment activities, and associated risks faced by German companies operating in Vietnam.

Over the past 10 months, Germany has taken a bold step in further solidifying its presence in Vietnam. A total of 26 foreign-led projects have been initiated, representing a combined investment of nearly $221.5 million. This not only reflects the confidence of German companies in the Vietnamese market, but also positions Vietnam as a promising destination for those seeking to diversify their interests in Asia.

As Vietnam continues to showcase its potential as a robust and strategic investment location, the survey results indicate a positive trajectory from German businesses looking to implement the China+1 strategy – with an emphasis on new green investments. The Vietnamese market stands ready to welcome and support such ventures, offering a platform for growth, diversification, and sustainable business practices.

According to the survey, when it comes to investment plans, 42 per cent of German companies in Vietnam prioritise diversifying their production and manufacturing, indicating a strategic focus on varied production capabilities. Sales and marketing (41 per cent), services (35 per cent), and logistics (31 per cent) closely follow, underscoring a comprehensive approach to business development.

The survey highlights the influence of the factors that shape local investments, with half recognising the growth potential of the Vietnamese market as a pivotal consideration. Customer proximity and localisation follows closely at 43 per cent, underlining a keen interest in aligning strategies with local dynamics. Skilled labour availability is also crucial, with 37 per cent stressing the essential role of a well-qualified workforce.

However, German companies in Vietnam encounter significant challenges, with 49 per cent identifying the substantial issue of low global demand as a primary hurdle. The challenge of skill shortages closely follows, with 41 per cent of respondents expressing concern, along with potential disruptions in the supply chain at 37 per cent. Other notable risks include economic policy (24 per cent), energy prices (24 per cent), and financing challenges (22 per cent).

German companies and companies with close ties to Germany are divided in their choices for international locations. By historical standards, inflation rates and commodity and energy prices are still high in some regions. In addition, the rise in interest rates, particularly in the Eurozone and the US, China’s weakness on the demand side, and geopolitical risks are weighing on the business of globally active companies.

In Autumn 2023, German companies were less optimistic about the economic development of their international locations than they were in the Spring – according to the more than 3,600 companies surveyed.

The global economic slowdown and high-interest rates are reflected in companies’ lower investment intentions. However, they are generally more expansionary at their international locations than in Germany, as a comparison between the figures in the AHK World Business Outlook and the DIHK economic survey show.

Danang aims high for regional economic standing

Danang Department of Planning and Investment has been coordinating with other departments and agencies to work on programmes to remove obstacles for investors and businesses in a bid to turn the city one of the biggest economic centres for Southeast Asia.

“Efforts are to be made to resolutely address obstructions, making it more favourable to implement some key projects that have already been licensed,” said the city on its portal. “The city will boost the implementation of legal procedures about land use right auctions, while supporting investors to carry out projects whose MoUs have been inked.”

The city will also complete investment procedures and put into use IT and industrial infrastructure works in service of investment promotion. Especially, the city “will continue to boost investment promotion activities and call for more domestic and foreign investors” to put more money into the city.

Speaking at the Danang Investment Forum last year, Prime Minister Pham Minh Chinh assessed that Danang had grown strongly after being separated from Quang Nam province to become a centrally controlled city many years ago.

“The city has become a big magnet for investors. It has turned nothing into something, turned difficult into easy, and turned impossible into possible. Those who have seen Danang before will deeply feel the transformation and development of the city,” the prime minister stated.

From a small city, Danang has grown to become a major metropolis in Vietnam, known in the country for its “worth living, worth visiting” reputation. Since the city was separated from Quang Nam province in 1997, it has become one of the fastest-growing economies in the country. The city’s average annual regional GDP growth rate was 9 per cent across 1997-2021. Over the past two decades, the economic structure has shifted in a positive direction, reducing the proportion of agriculture, forestry, and fisheries while increasing the proportion of service industries.

Urban space has also more than tripled compared to 1997, and the urban facade transforms daily with many high-rise architectural works and unique traffic projects.

In addition, businesses and investors appreciate the city for its dynamic investment environment. Danang sits alongside the top localities nationwide in the Provincial Competitiveness Index, Public Administration Reform Index, and ICT Application Index, as well as other indices. In particular, Danang has promulgated many breakthrough policies imbued with humanity and many solutions to ensure social security and improve the quality of people’s lives.

In early November, the prime minister approved the Danang plan for this decade and with a vision to 2050. Le Thanh Tung, deputy director of Danang Department of Planning and Investment, said the decision will concretise important development directions that the party and government have for the central city.

According to the plan, the city will implement seven key tasks: restructuring and building a growth model towards adaptive transformation, adjusting investment structure appropriately, improving investment efficiency, improving economic competitiveness, boosting admin reform, building an e-government, and creating a foundation to improve autonomy and resilience to external impacts.

Another task is to accelerate the growth rate of the industrial sector, especially high-tech industry and IT, which is oriented to be one of the three pillars in the new era of Danang’s economy.

The city will also promote internal strength and geographical location advantages to develop service industries, focusing on tourism, transportation, and warehousing services. Focus is also given to developing Danang into a regional international financial centre, forming a non-tariff zone and free trade zone, and developing high-quality ICT, healthcare, education, and training services.

Meanwhile, the city will promote restructuring of the agricultural sector to improve value, competitiveness, and sustainable development. Danang also plans urban development based on international standards and the development principles of a modern city.

Last but not least, the city will ensure effective use of natural resources, water resources, biodiversity protection, environmental protection, and adaptation to climate change.

According to the plan, Danang will focus on innovation, the knowledge economy, and comprehensive digital transformation to improve growth quality. The city will not only promote the role of economic sectors, including the collective economy, private economy, and foreign-invested economy, but also mobilising and effectively using all social resources to create breakthroughs in building a synchronous and modern socioeconomic infrastructure.

At the same time, efforts are being made to improve the quality of administrative reform and the business environment to take advantage of opportunities in regional and international development trends, shifts in investment flows, and the investment waves beneficial to Vietnam and the city in particular.

The city will also comprehensively develop education and training, improve the quality of human resources, and maximise cultural and human factors as the foundation for sustainable development.

Clarity at the heart of plan on owner figures

The first-ever plan to determine the number of houses and apartments of every owner is expected to ensure that Vietnam’s real estate market is more transparent. The Administrative Management Police Department under the Ministry of Public Security (MPS) recently signed a cooperation agreement with Vietnam Post Corporation to implement the proposal.

Accordingly, the system will be set up based on the postal system, which already possesses information about house numbers. Local law enforcement has data on household registration, and the MPS has data on the population and property documents.

The department said that it is in the process of coordinating with the post office as well as the ministry to craft solutions on the house number determination plan.

The identification of homes owned by individuals aims to implement the prime minister’s direction on restoring order and overcoming inadequacies with investment consulting, and construction and transportation projects.

Lieutenant colonel Nguyen Thanh Vinh, director of the National Population Data Centre under the MPS, said that identifying house numbers will bring many benefits to people as well as local management agencies.

“The first goal is to create a real estate identification network associated with each citizen, making it convenient to find homes by address and delivery, ensuring the quality of urban development. The next very basic goal is to make real estate assets transparent and develop the real estate market healthily. The number of buildings that a person owns will be collected in complete data that will be easy to trace and manage,” Vinh said.

In terms of benefits, identifying house numbers will help management authorities control certain data regarding those properties. This will contribute to preventing speculation, tax evasion, and money laundering via the real estate market, he added.

In addition, the plan could help people carry out real estate transactions more conveniently, avoiding address confusion. In addition, identifying house numbers will help state management agencies perform management tasks more effectively, such as collecting taxes, issuing construction permits, and checking fire safety.

Le Minh Duc, founder of Remaps, an online platform providing real estate purchasing services and looking up real estate project maps, said that the policy will have a positive impact, reducing speculation and hoarding as well as helping low-income people attain more opportunities to access housing.

“Strictly managing real estate is a trend in many countries, especially when applying IT to management. This policy will also help to set up regulations on taxes imposed on people who have many real estate assets that should have been reserved for lower-income earners,” Duc said.

Currently, the Ministry of Construction and the Ministry of Natural Resources and Environment are responsible for building data on the number of homes. The goal is to specifically number each house, apartment, and plot of land under unified rules. From that, the MPS will collect a database of house numbers, plus information collected from People’s Committees at all levels, on the principle of standardising data.

The Ministry of Finance is also researching and building a real estate tax law, including research on taxes on second homes, vacant houses, and land. It is expected to be added to the 2024 Law and Ordinance Development programme and discussed in 2025.

Financial stability key to green finance for plastics industry

Foreign investors continue to eye the plastics industry in Vietnam, making it an enticing prospect for numerous merger and acquisition moves. The sector is prioritising the acquisition of more green investment to enhance its global competitiveness.

These insights were shared at a media roundtable on the importance of financial stability in attracting investment to the plastics sector held by Atradius, a major global provider of trade credit insurance (TCI) and information services. The discussion was organised on the last day of the 2023 Vietnam Plastic Expo at the Saigon Exhibition and Convention Center on November 17.

Representatives from Atradius Vietnam, the Vietnam Saigon Plastics Association (VSPA), and the media attended the event.

The plastics industry had been experiencing an annual growth rate of 12-15 per cent over the past five years. However, the industry experienced an on-year decline of 12.2 per cent in exports in the first nine months of 2023.

Chung Tan Cuong, chairman of the VSPA said, “One of the key growth factors over the next few years will be to acquire more green investment. Plastics firms will need to focus more on providing comprehensive and transparent data for investors to evaluate their businesses to access these green resources. Merely producing eco-friendly products won’t be enough.”

Many firms are actively addressing potential liquidity challenges through in-house retention and customer credit risk management, often in collaboration with financial institutions. One such option that has gained traction is TCI, which helps businesses mitigate risks and ensure financial stability. Atradius, the world’s second-largest credit insurer with a 25 per cent global market share, has been working with VSPA to understand and address the challenges firms have in securing green finance.

“We often refer to TCI as a shield that helps sales teams confidently sell to their clients. With TCI, plastic businesses will be able to minimise trade risk and foster sustainable growth. Moreover, TCI can enhance a company’s creditworthiness, making it easier to secure financing, including green loans,” said Vu Thi Duc Hanh, country manager of Atradius in Vietnam.

Atradius, with its expertise in TCI and financial solutions, can provide insights into payment practices, cash flow management, and liquidity solutions, enabling plastic businesses to adopt strong credit risk management strategies, especially when considering and working with new customers.

Vietnam leads in Southeast Asia’s digital economy surge

Vietnam has consistently outpaced its Southeast Asian counterparts by maintaining its position as the fastest-growing digital economy in 2022 and 2023, and it is poised to sustain this impressive growth through 2025, according to reports from Google, Temasek, and Bain & Company.

Amid the backdrop of a challenging global economic environment, Vietnam’s digital economy continues to shine brightly, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan said at the Vietnam Digital Industry and Trade Summit 2023, held in Hanoi on November 21.

Reports published by Google, Temasek, and Bain & Company on November 1 project that Vietnam’s gross merchandise value (GMV) will experience a robust compound annual growth rate (CAGR) of 20%, surging from US$30 billion to US$45 billion by 2025. The report underscores that the driving force behind this GMV growth in Vietnam’s digital economy over the next two years will be the thriving e-commerce sector.

“The Vietnamese e-commerce sector has achieved remarkable growth in recent years, ranging from 16% to 30%. In 2020 alone, the sector expanded by 20% and is projected to generate revenue of US$20.5 billion this year,” stated the deputy minister.

He expressed optimism that e-commerce and the digital economy in Vietnam will continue to flourish in the years ahead, fostering economic growth and supporting business recovery and expansion.

Deputy Minister Tan stressed the significance of identifying technology trends in digital transformation and implementing measures to enhance e-Government in critical sectors, ultimately driving the growth of the digital economy.

As part of the Government’s endeavors to stimulate domestic consumption and encourage residents to engage in e-commerce and digital technology-based transactions, the National E-commerce Week event is scheduled to take place from November 27, 2023, followed by the Online Friday 2023 program starting at 00:00 on Friday, December 1, 2023.

EuroCham celebrates 25 years of presence in Vietnam

The European Chamber of Commerce (EuroCham) has held a ceremony in HCMC to commemorate its 25-year journey in Vietnam.

EuroCham has helped nurture diverse collaborations between Vietnam and European countries. The ceremony also paid tribute to EuroCham’s member companies that have achieved outstanding success in Vietnam.

Torben Minko, EuroCham vice chairman, said, “EuroCham stands as a symbol of unity.” The bridge it has forged between Europe and Vietnam has been strengthened through mutual support and collaborative endeavors, he added.

The chamber acknowledged prominent companies that received Vietnam Business Awards in four categories. Heineken Vietnam was honored as the Green Business of the Year, FPT Software received the Business Innovation Award, DAFC was recognized for SME Excellence, and Nestlé Vietnam was celebrated as Employer of the Year.

During the event, EuroCham also presented the Lifetime Achievement Award to Alain Cany, chairman of the EuroCham Advisory Board, in recognition of his significant contributions to the organization’s growth.

Finance Ministry weighs tariff adjustment options for animal feed material

The Finance Ministry is considering two potential options for adjusting tariffs on materials used in animal feed production.

These considerations come as part of the ministry’s efforts to gather feedback on a draft decree that aims to revise various aspects of export tariffs, preferential import tariffs, tariff nomenclature, fixed duties, mixed duties, and out-of-quota import duties.

The Ministry of Finance has conducted a thorough review of tax rates for two distinct categories of goods. For the first category, the ministry is contemplating a reduction in taxes, aimed at supporting local businesses, streamlining trade processes, simplifying administrative procedures, and curbing potential fraudulent practices in goods classification.

Meanwhile, the tax rates for the second category of goods will remain unaltered, as they are deemed appropriate for the current economic circumstances.

Previously, several ministries and associations had proposed a reduction of the most favored nation (MFN) tariffs on soybean meal, a crucial component in animal feed production, from 2% to 0%. However, the Ministry of Finance is currently deliberating whether to maintain the existing tax rates for soybean meal or implement a more modest reduction by just one percentage point, lowering the MFN tariffs from 2% to 1%, as opposed to reducing them to zero, as originally suggested.

The ministry underscores the importance of revising tax rates outlined in the schedules of export tariffs, preferential import tariffs, tariff nomenclature, fixed duties, mixed duties, and out-of-quota import duties. This revision is expected to have positive impacts, including the mitigation of inflation, the alleviation of challenges faced by local businesses, the stimulation of investment, the promotion of technological advancements, cost reduction, and an enhancement of overall competitiveness in the market.

SJC gold price exceeds US$2,978 per tael

The SJC-branded gold price has changed by domestic gold businesses for sometimes on November 22.

Each tael of SJC gold has increased at over VND72 million (US$2,978) for selling.

By around 3:00 p.m., the PNJ company listed the buying price at VND71.3 million (US$2,945) per tael and the selling price at VND72.1 million (US$2,986) per tael, increasing VND800,000 (US$33) for buying and VND900,000 (US$37) for selling compared to previous day in Ho Chi Minh City.

Meanwhile, in the capital city of Hanoi, at the same time, the SJC company listed the buying price at VND71.3 million (US$2,945) per tael and the selling price at VND72.02 million (US$2,982) per tael, an increase of VND800,000 (US$33) for both selling and buying.

Apart from the price of SJC gold bars, domestic gold enterprises have adjusted to increase sharply the price of gold ring.

Accordingly, the price of SJC gold ring rose at VND59.75 million (US$2,469) per tale for buying and at VND60.75 million (US$2,515) per tael for selling, an increase of VND350,000 (US$33) for both selling and buying.

Similarly, the price of PNJ-branded gold ring was listed at VND59.7 million (US$2,466) per tael for buying and VND60.75 million (US$2,515) per tael for selling, surging VND350,000 (US$33) for both buying and selling.

Policies, mechanisms for LNG proposed to ensure energy security

Liquefied natural gas (LNG) importing is inevitable to maintain energy security in Vietnam. There should be suitable policies and mechanisms to balance the benefits between importers and customers when this process happens.

Tran Anh Khoa from the Unit of Sources and Market Development (under PetroVietnam Gas JSC. – PV Gas) informed that the domestic gas sources for energy production have seen remarkable reduction year after year. In 2023, the gas amount to harness electricity in the Southeast region is only 4.3 billion cubic meters per year. Predictions show that in 2030, the figures will drop to 1 billion and 0.6 billion in the Southeast and Southwest regions, respectively.

PV Gas commented that the import of LNG is unavoidable with the direction that Vietnam will no longer use coal to create electricity. The trade-in amount from abroad will both supply new LNG projects and compensate for the shortage in existing gas-fired power plants. General Director of PV Gas Pham Van Phong affirmed that this LNG importing is an important and irreversible energy trend in the global energy market to timely supplement any natural gas shortages due to decreases in domestic gas reserves.

In Vietnam, PV Gas is the only permitted organization to buy LNG from other countries. It launched its Thi Vai LNG Terminal in July 2023, with the capacity of its first and second stages at 1 million tonnes (in 2023) and 3 million (in 2026) a year, correspondingly.

In the South-Central Coast region, PV Gas is working with AES Corporation (the US) to construct Son My LNG Terminal, expected to run in 2026. The capacity of its first and second stages will be 3.6 million and 6 million tonnes per year.

In the North region, PV Gas is planning to invest in its Northern LNG Terminal for a capacity of 3 million tonnes a year in the first stage and 6 million in the second one. Obviously, PV Gas is the pioneer in building necessary infrastructure for LNG imports and supply to the domestic market.

Having said that, Dr. Nguyen Quoc Lap, Chairman of the Vietnam Petroleum Association (VINPA), still concerned about possible challenges in implementing LNG projects in the country. The first could be insufficient legal corridor for a suitable replacement when the Government guarantee is removed (via financial regulations and charters of state-owned economic organizations like EVN, PVN).

Adding to that is a lack of guarantee for currency exchange and international payment obligation when importing LNG. There is no consistent price frame for electricity harnessed from LNG, nor is there any commitment to the total yearly energy output or projects’ transmission and connection systems.

Dr. Lap proposed that urgent measures should be adopted: introducing suitable mechanisms so that an LNG power plant like EVN has power to negotiate directly with consumers to sell electricity, power plants are able to directly buy LNG and lease a space for storage as well as regasification, and finally power plants can invest in transmission and connection lines.

He stressed that LNG electricity prices should be negotiable in compliance with the principles of the market just like other countries in the world.

One more challenge to LNG importers is that to satisfy the needs of all 13 LNG energy projects in 2030, the capacity of domestic warehouses must reach 15 – 18 million tonnes of LNG per year. Sadly, the current capacity of Thi Vai LNG Terminal – first stage is only 1 million tonnes a year. Even when stage two comes into operation, there is still a serious lack.

Meanwhile, to fulfill the goals of net zero carbon dioxide emissions by 2050 as committed by the Government in the 2021 United Nations Climate Change Conference (COP26), all LNG power plants have to use hydrogen partially or totally for burning. This means LNG projects and terminals will only have about 20 years of operation before the power plant switches partial or total operation on hydrogen.

Counting certain tardiness, some projects might not have enough time to recover their capital. Hence, to minimize risks for businesses, experts suggested that there should be appropriate plans for domestic gas-fired and LNG power plants to turn to hydrogen use so as to ensure their profits.

Other experts mentioned the expected high price of electricity from LNG and its dependence on market fluctuations, not to mention huge investments in warehouses, regasification infrastructure, and gas transportation vehicles. It is, therefore, necessary to carefully calculate the total costs of electricity harnessed from LNG before deciding to pour investments in this sector.

Predicted risks and geopolitical fluctuations from now to 2030 are also factors to increase the prices of LNG imports, which is another concern of investors since this will obviously affect the performance of an LNG project as well as the retail electricity price in negotiations.

Finally, LNG importers proposed to concentrate on developing infrastructure for LNG power in certain centers and then delivering the gas to satellite thermal power centers. This is the optimal cost solution to reduce production expenses from imported LNG.

Deputy Director Bui Quoc Hung of the Department of Electricity and Renewable Energy (under the Ministry of Industry and Trade) commented that LNG power has various advantages like huge supply, stable operation, high performance (reaching over 62 percent), quick activation to compensate for immediate capacity shortage of the current system (in case renewable energy sources stop generating power), reduction of harmful gas emissions.

This type can even completely replace all coal-fired power plants in the future, helping the electricity industry go green more easily.

The possible challenges for this new energy type in Vietnam is the obligation to follow regular investment procedures, the lack of a corresponding operation project, the difficulties and time-consuming in choosing suitable experienced investors, the need to fully import LNG that leads to unstable prices, and the urge to develop a price mechanism to avoid unwanted impacts on retail prices when supply prices fluctuate.

43 percent of Gen Z consumers shop online every day

Approximately 57 million people shop online on e-commerce platforms every year. Thereby, the form of electronic commerce is becoming a prevalent trend and is more convenient than traditional shopping.

On November 21 morning, the Vietnam e-Commerce and Digital Economy Agency under the Ministry of Industry and Trade organized the Vietnam Digital Industry and Trade Summit 2023 in the capital city of Hanoi.

Speaking at the opening ceremony, Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan said that the global economic growth has also slowed down due to the global tightening of monetary policy. In addition, the effects of the conflict between Russia and Ukraine continue to cause pressure on economic activities, seriously affecting all socio-economic aspects.

Accordingly, the global trade slowdown began in the fourth quarter of 2022 until now, leading to global trade growth in 2022 increasing by only 2.7 percent.

The World Trade Organization predicted that global trade in 2023 would grow by only 1.7 percent.

Similarly, the Vietnam economy has been facing difficulties and challenges comprising a lack of orders together with product consumption and capital shortage.

Amid the current tough situation, the Vietnam’s e-commerce and digital economy have maintaining to be a bright spot on socio-economic development.

The Deputy Minister of Industry and Trade quoted reports from Google, Temasek and Bain & Company which were announced on November 1, Vietnam remains the fastest-growing digital economy in Southeast Asia in two consecutive years of 2022 and 2023 and the country is expected to hold this position until 2025 equaling with the Philippines.

The Gross Merchandise Value (GMV) of Vietnam is expected to gain the Compound Annual Growth Rate (CADR) with a growth rate of 20 percent from US$30 billion in 2023 to nearly US$45 billion in 2025.

Especially, e-commerce is expected to dominate GMV growth of the Vietnam’s digital economy in the next two years. 

According to the surveys and reports of the Ministry of Industry and Trade, the Vietnam’s digital economy continued to maintain the growth rate of 20 percent in 2022.

During the passing years, Vietnam’s e-commerce has always maintained a growth rate ranging from 16 percent to 30 percent which is expected to reach US$20.5 billion in 2023.

Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan said that along with such a growth rate, the e-commerce and digital economy of Vietnam is expected to develop strongly in 2023 and the next years which would create momentum for economic development.

At the Vietnam Digital Industry and Trade Summit 2023, representatives of domestic and foreign e-commerce platforms said that online shopping and e-commerce are expected to continue booming in Vietnam in the coming years.

Deputy General Director of Lazada in Vietnam Dang Anh Dung informed that surveys and statistics of this e-commerce platform showed that, approximately 57 million Vietnamese people shop online, mostly in big cities such as Hanoi, Ho Chi Minh City and Da Nang.

Of these, 43 percent of Gen Z consumers access shopping apps for finding and purchasing products online every day, added Mr. Dung.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes

This post was originally published on 3rd party site mentioned on the title of this site

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