Creating sustainable businesses in Vietnam
Businesses need to leverage innovative technologies to succeed in today’s competitive digital marketplace, experts have said.
But for Vietnam’s small and medium-sized enterprises (SMEs) this could be a challenging prospect, they admitted.
In a survey by Japanese electronics giant Epson of 864 SMEs in six of Southeast Asia’s largest countries by GDP, 62 percent of respondents in Vietnam cited cost as the reason for not updating technologies.
With SMEs contributing 40 percent of Vietnam’s GDP, it is vital for them to be competitive in the regional and global markets. This means that business owners need to be building sustainable businesses that can adapt easily to change from an operation and environmental perspective.
SMEs are at the heart of the nation’s economy, employing 51 percent of the workforce and accounting for 98 percent of all enterprises, and as such need to be empowered with the right tools to participate successfully in the emerging digital economy, the report said.
Companies are also becoming increasingly aware of the need to act sustainably since this can positively impact company efficiency, brand value and reputation, growth, and stakeholder relations.
From an operations perspective, SMEs can benefit from the adoption of sustainable business practices through the reduction of operating costs by selecting hardware that supports business objectives and streamlines energy use.
Streamlining energy usage and reducing SMEs’ carbon footprint is an ideal way to lower operating costs in the long run and be better to the environment.
For example, retailers can now deploy point-of-sale (POS) printers that connect easily with other technologies and make printing reliable and easy to use for business owners.
Eighty one percent of Vietnamese respondents saw this connectivity as a key benefit.
Offices can also manage printing costs more sustainably with environment-friendly heat-free printers, and on-demand colour label printers not only save costs but also reduce wastage – a boon for SME food manufacturers chasing product sales.
However, fostering digital transformation requires more than the adoption of new technologies. Today this means creating environments where businesses can leverage innovation to deliver meaningful change that drives positive business outcomes.
Epson believes that sustainability can be addressed through investment in new technologies that also have a reduced environmental impact.
The company’s environmental vision for 2050 sets out a goal to provide products and services that contribute to the environment by making efficient use of energy and resources and reducing the environmental impacts of production processes and customers’ business processes.
Travel firms need customers to assist through pandemic
Tourism is among the sectors hit hardest by COVID-19 and many travel companies have adopted measures to retain customers and create momentum for their post-pandemic recovery.
According to industry insiders, travel companies need to retain at least 20% of their customers to survive the pandemic. Many have linked together to overcome these turbulent times.
While travel companies have tried to adjust their cash flow they also need support from customers and especially the Government. Once they access Government policies on lower taxes and extensions to debt repayments and social security payments, travel companies would feel more confident in fighting the COVID-19 crisis.
Saigon Hi-tech Park expects to rake in 19 bln USD in investment in 2020
The Saigon Hi-tech Park (SHTP) in Ho Chi Minh City expects to draw about 19 billion USD in investment this year, according to its management board.
The value of hi-tech products created at the SHTP would reach 95 percent of the yearly plan, contributing to the city’s socio-economic stability and budget.
Deputy head of the SHTP management board Le Bich Loan said, to attract investment, it has held meetings with 26 investors, including 15 domestic and 11 foreign firms, who were looking for business opportunities in the hi-tech park.
Earlier this year, the SHTP Labs has inked an agreement with the Korea Institute of Industrial Technology (KITECH) to establish a Vietnam-Korea training centre at the park.
Agriculture exports face difficulties due to quarantine interruptions
COVID-19 has had a negative impact on the global agricultural supply chain, including from interruptions to quarantine and other control measures.
The Hanoi Irradiation Centre is one of two facilities in Vietnam meeting standards on the irradiation of fresh fruit for export to the US and Australia.
Since the beginning of the recent crop, the centre has received just one request to irradiate 10 tons of longan for export to Australia. The longan output in Son La and Hung Yen provinces is generally more than 120,000 tons by this time of year.
The irradiation process includes on-site quarantine performed by a plant quarantine specialist from the US. Due to COVID-19, however, the expert is unable to return to Vietnam to work.
This business currently has 15 tons of mangoes, 17 tons of dragon fruit, and 36 tons of longan waiting for quarantine before being exported to the US. If no timely solution is adopted the business will face huge losses.
The local agriculture sector is now strengthening and restoring production as supply of many goods increases as harvests are completed. The prevalence of COVID-19 in many import markets remains a complex matter, however. Exports seem likely to face a range of difficulties in the time to come.
Vinh Phuc’s investment promotion efforts pay off
The northern midland province of Vinh Phuc has reaped significant achievements in investment attraction thanks to its efforts in renewing methods in this regard.
During the 2016-2019 period, apart from investment promotion activities at home, the province has promoted its images abroad, especially developed countries like the UK, Germany, the Czech Republic, Italy, Japan and the Republic of Korea (RoK).
During working trips to Japan, the RoK, Europe (the Netherland, Germany and the Czech Republic) and the US, Vinh Phuc’s delegations successfully organised six investment promotion conferences with the participation of nearly 500 investors.
The province’s officials also had working sessions with representatives from 100 organisations and businesses in these countries, contributing to promoting its images and position to foreign investors.
During a large-scale investment promotion conference held in 2018, Vinh Phuc approved investment plans and signed memoranda of understanding on 10 projects with total capital amounting to nearly 1.5 billion USD.
Last year, at another conference introducing Vinh Phuc’s potential to businesses from Europe and the US, the relevant sides also signed memoranda of understanding on investment cooperation and support to Vinh Phuc in attracting EU-invested projects.
On this occasion, Vinh Phuc also signed three memoranda of understanding on three projects worth over 1 billion USD with T&T Group.
Notably, provincial leaders had meetings with ambassadors and officials of Vietnamese representative agencies abroad, and representatives of international organisations and business associations.
At the same time, they met with prestigious groups at home and abroad to call for their investments.
Vinh Phuc province has prioritised major projects with high-quality, using high-technologies.
Between 2016 and 2019, the province attracted 2.5 billion USD in foreign direct investment (FDI) and some 55.28 trillion VND (2.38 billion USD) in domestic direct investment (DDI).
By the end of June 2020, Vinh Phuc was home to 392 FDI projects with total registered capital of 5.57 billion USD, according to statistics of the provincial Department of Planning and Investment.
The projects were run by investors from 18 countries and territories. The Republic of Korea has the most projects with 210, followed by Japan, China and Thailand.
Many global groups have made their presence in Vinh Phuc, such as Toyota, Honda, Sumitomo from Japan, Piaggio from Italy, De Heus from the Netherlands, Daewoo, Haesung Vina, Partron Vina, Cammsys from the Republic of Korea, Prime Group from Thailand and Weldex from the US.
The province has also attracted 782 DDI with total investment surpassing 93.7 trillion VND (around 4 billion USD at current exchange rate). Several major Vietnamese corporations have chosen Vinh Phuc for their investment, such as FLC, Vingroup, SunGroup, and Viet Duc Steel.
The flow of investment capital, both FDI and DDI, into the province in the first six months of this year decreased as a consequence of the coronavirus pandemic. Total FDI capital in the period stood at 135.6 million USD, equivalent to only 32.1 percent of the figure in the same period last year. The money was poured into 14 new projects and 19 existing ones.
Meanwhile, DDI capital attraction in the period came to 2.67 trillion VND, equivalent to 51.5 percent of the figure in the same period of 2019. The capital was pumped into 24 new projects and 9 existing ones.
Vinh Phuc has designated 18 industrial parks with total area of 5,228 ha in a master plan to 2020 approved by the Prime Minister. By now nine industrial parks have received investment certificates. Industrial parks in Vinh Phuc have good technical infrastructure and professional management, thus contributing to attracting investors to the province. They reported an average occupancy rate of nearly 62 percent.
Thanks to the province’s endeavours to complete infrastructure in industrial parks and a transport system connecting them, as well as efforts to improve the business environment and reform administrative procedures, Vinh Phuc has become more popular among foreign investors.
Vietnamese goods exhibition centre inaugurated in Thailand
The Business Association of Thai-Vietnam (BAOTV) inaugurated the Vietnamese Goods Exhibition Centre at VT-Namnueng shopping mall in the Thai northeastern province of Udon Thani on August 23.
Speaking at the ceremony, BAOTV Chairman Ho Van Lam said the centre will introduce and develop distribution channels of Vietnamese goods in Thailand, making them more popular in the country.
Vietnamese Consul General in Khon Kaen city Hoang Ngoc Son said the inauguration of the centre not only makes it easier for consumers in the northeast of Thailand to access high-quality Vietnamese goods but also helps the two countries’ firms access trade and explore business opportunities, towards a more balanced trade between the two nations.
He hoped that the BAOTV will continue striving to open more similar centres in supermarkets and shopping malls, turning them into destinations for tourists.
Vice Governor of Udon Thani province Wanchai Janthorn spoke highly of contributions by the Thai community of Vietnamese descent and the Vietnamese Thai business people in particular to Thailand’s socio-economic development.
The northeast of Thailand is now home to over 70,000 Vietnamese Thai people./.
International forum Franconomics 2020 to be held in October
The international forum Franconomics is scheduled to take place in Hanoi capital, northern Hung Yen province, and Hai Phong port city on October 22-23 with the topic “From start-up to smart-up”.
The forum will be jointly held by the International Francophone Institute (IFI) and the Organisation Internationale de la Francophonie (OIF).
Besides the main forum, this year’s event will feature an event themed “smart tourism: toward the sustainable development, a harmony of economy, culture and environment”.
Other activities include the second national anthem singing festival, a pitching day for start-ups, and a launching ceremony of Hung Yen Digital Museum and introduction of other digitalisation projects.
Franconomics is a multidisciplinary dialogue on important socio-economic topics for scientists, businesses, investors, and policymakers both inside and outside the French-speaking community with its 88 members and observers.
Each year it is organised in a different place of Vietnam to create opportunities for connecting and promoting cooperation, accessing and supplying technology, high-quality workforce, expanding Partner Network for Development./.
Indonesian gov’t promises nationwide 4G internet services by 2022
The Indonesian government is committed to accelerating a “national digital transformation” through five priority programmes, Indonesian Communication and Information Minister Johnny G. Plate has said.
The programme includes establishing and extending the geographic coverage of 4G services nationwide within the next two years.
During a public discussion in Jakarta on August 22, Johnny affirmed that by the end of 2022 at the latest, 4G services will be available across the country which will enable all citizens to migrate and shift into a digital society era.
Statistics showed that some 12,500 villages and sub-districts across the country currently do not have reliable access to the internet.
The Indonesian government will increase the rate of internet access nationwide, decrease disparity of internet access between regions and establish a fast internet connection, he stressed.
Johnny also vowed to develop the public’s digital literacy, especially for micro, small and medium enterprises, as well as farmers and fishermen.
Previously, the ministry collaborated with more than 100 communities in the country to carry out digital literacy programs nationwide to educate the public on staying safe while navigating the digital world and understanding the signs of online fraud.
According to the Global World Digital Competitiveness Index, Indonesia ranked 56th out of the 63 countries in 2019, despite having 175.4 million internet users./.
Quang Ninh enjoys potential for forestry tourism development
The northeastern province of Quang Ninh has a lot of advantages to develop forestry tourism in addition to marine, cultural and spiritual tourism, according to experts.
The locality is home to Yen Tu National Forest, Dong Son-Ky Thuong Natural Conservation Area, and Bai Tu Long National Park. All are valuable natural resources to develop forestry tourism.
According to scientists, Yen Tu forest is home to a wide variety of animal and plant species, including 830 kinds of plant, of which 38 have been recognised as valuable and rare such as erythrophloeum fordid, teakwood, textured wood and pedocarpus fleurgi.
Yen Tu also has a rich fauna, of which 23 species have been recorded on Vietnam’s Red book for their scarcity.
Covering an area of over 2,600 ha, of which over 1,700 ha is natural forest, Yen Tu is not only a well-known tourist attraction, but also a centre of Vietnam’s Buddhism.
Meanwhile, Dong Son – Ky Thuong natural conservation area has been known for its diversified biodiversity value on a vast land.
The area is abundant with flora and fauna. It has 1,163 species of woody and herbaceous plants and 224 species in four groups of birds, animals, reptiles and amphibians, including 51 rare and specious species of flora and fauna which are in Vietnam’s Red Book and one in the World’s Red Book.
Located within Bai Tu Long Bay and near the UNESCO-recognised Ha Long Bay, Bai Tu Long National Park is a natural treasure for Vietnam.
Formed on June 1, 2001, the park covers 15,783 hectares, of which forests and forest land make up 6,125 ha on more than 40 islands, and water surface accounts for 9,650 ha.
It is home to 1,909 species of fauna and flora, including 72 types of animals and 30 kinds of plants listed in Vietnam’s Red Book of endangered species./.
Trade surplus amounts to 10 billion USD by mid-August
Exports continued to recover in the first half of August, helping the country record 10 billion USD in trade surplus so far this year, according to the General Department of Vietnam Customs.
From August 1 to 15, the country earned nearly 12.7 billion USD from exports while importing 10.8 billion USD worth of goods.
That added up to a total of more than 160.2 billion USD in overseas shipments during the seven months and a half, rising by some 1.8 percent or nearly 3 billion USD year on year. Meanwhile, imports fell by about 4 billion USD to 150.2 billion USD.
That resulted in a trade surplus of 10 billion USD by mid-August.
Some outstanding export items in the first half of August included mobile phones and components (2.58 billion USD); computers, electronic products and components (1.9 billion USD); textile-garment products (1.36 billion USD); machinery, equipment and spare parts (1.11 billion USD); and footwear (652 million USD).
During the period, major import commodities were computers, electronic devices and components (2.9 billion USD); machinery, equipment and spare parts (1.58 billion USD); mobile phones and components (759 million USD); and fabric (447 million USD), statistics show./.
Thai central bank to help COVID-19-hit firms with debt restructuring
The Bank of Thailand (BoT) will focus on assisting businesses, especially those severely affected by COVID-19 pandemic, to restructure their debts, the bank’s Governor Veerathai Santiprabhob said on August 21.
Veerathai said that readjusting fiscal policy can help the Thai economy recover from the impact of COVID-19.
However, Veerathai said the central bank cannot lower its 0.5 percent benchmark interest rate, as it is already at a record low.
The BoT’s debt restructuring scheme will allow debtors to suspend principal and interest payment for up to six months, said the governor.
Normally, debt restructuring is available together with loan offerings, said Veerathai.
He said that the additional loan guarantee scheme will support small and medium-sized enterprises that have suffered from the pandemic.
The governor said that Thai commercial banks have withdrawn more than 75 billion THB (2.37 billion U.S. dollars) of the central bank’s soft loans since its implementation, with total loans amounting to more than 500 billion THB (15.8 billion U.S. dollars).
Under the conditions of the soft loan scheme, banks cannot offer credit lines to all customers, explained Veerathai./.
Over 78 percent of businesses listed on HNX report profit in Q2
More than 78 percent of businesses listed on the Hanoi Stock Exchange (HNX), or 268 firms, reported profit in the second quarter of 2020, with combined value of 11.38 trillion VND (491 million USD), down 1.14 percent year on year.
According to reports of listed businesses, in the first half of this year, total after-tax profit of companies listed on the northern bourse reached 10.67 trillion VND, representing a fall of 2.8 percent year on year. Seven out of 11 sectors suffered decrease in profit over the same period in 2019.
Meanwhile, five out of 11 sectors reported year-on-year increase in profit, with trade-service-accommodation-restaurant and finance sectors recording highest rises with 56.8 percent and 11.7 percent, respectively.
However, only 17 out of 48 businesses in the trade-service-accommodation-restaurant enjoyed profit in the first half of 2020.
At the same time, the sharpest fall in after-tax profit was seen in the real estate sector at 79.4 percent to 103.7 billion VND in the first half of 2020 from 634.3 billion VND in the same period of 2019. It was followed by agro-forestry-fisheries sector with a decrease of 46.9 percent.
Downturn was also seen in mining-oil and gas sector at 12.6 percent in the first half of this year, mostly because of adverse impacts of the COVID-19 pandemic.
At the same time, 74 businesses posted losses, with combined value of 711.9 billion VND.
Six out of 11 sectors saw year-on-year increases in losses in the first six months of this year, led by real estate sector which saw total losses shoot up 341 percent to 121.3 billion VND in the first half of 2020. The mining-oil and gas sector followed with a 225 percent increase in the value of losses, and transport-warehouse at 241 percent.
The major reason behind the situation was the COVID-19 pandemic, which forced companies to suspend their production and business./.
Indonesia’s July trade surplus highest in nine years
Indonesia recorded 3.26 billion USD in trade surplus in July, a nine-year high, as the export value reached 13.72 billion USD while imports were 10.46 billion USD.
Coordinating Minister for the Economy Airlangga Hartarto said recently that the July surplus was mainly influenced by improved export performance, particularly non-oil and gas exports, and reduced demand for imports of consumer goods.
Several commodities that contributed to exports in the industrial sector include precious metals, jewelry/gems, vehicles, iron and steel, as well as electrical machinery and equipment.
This means that Indonesia’s main export commodities are still highly competitive amid the decline in global demand as a result of the COVID-19 pandemic, the official noted.
Meanwhile, main import items include consumer goods (accounting for 10.63 percent of total imports last month), capital goods (18.79 percent), and raw/auxiliary materials (70.58 percent).
Imports of consumer goods experienced a decline in demand by 21.01 percent month on month to 1.11 billion USD, which is partly attributed to the success of the programme to increase the consumption of domestically produced goods.
The decline in imports of raw/auxiliary materials is also expected to provide opportunities for domestic industries/business actors to be able to supply them and take over the share of imports. Besides, the increase in imports of capital goods is a positive signal in line with the rise in the Manufacturing Purchasing Managers Index (PMI), which shows that production activity has also begun to increase, according to the Coordinating Minister for the Economy./.
Vietnam among markets sustaining growth this year: The Economist
In a recent article, The Economist said a few emerging markets will still grow this year, including Vietnam.
It noted that this year could be a good one for what economists call convergence. This normally takes place when poor economies grow faster than rich ones, narrowing the income gap between them. This year will be a bit different. Few emerging markets will grow at all – perhaps China, Egypt and Vietnam. But because advanced economies will probably retreat even faster, the gap between them will narrow, the article said.
The article mentioned the World Bank’s new book – “Global Productivity: Trends, Drivers, and Policies”, in which the bank uses an algorithm to sort through many combinations of countries, looking for groups that seem to be converging with each other.
Based on the productivity performance of 97 economies since 2000, the bank identifies five clubs. The three gloomiest groups comprise fairly poor countries. A fourth contains some big ones of unfulfilled potential, such as Argentina, Brazil, Indonesia, Mexico and South Africa.
The most successful club spans all today’s advanced economies as well as 16 emerging markets, such as China, India, Malaysia, Thailand and Vietnam.
According to the book, poorer members tend to grow faster than the rich ones, at a pace that would halve the productivity gap between them every 48 years.
The authors of the World Bank’s book worry that the COVID-19 pandemic will inhibit investment, shorten supply chains and breed insularity, all of which could hamper convergence.
But they also note some potential silver linings. Crises, for instance, can encourage structural reforms; the lack of upkeep of outdated capital during dark times can hasten its replacement with newer technologies in the recovery, according to The Economist./.
Bamboo Airways leads in on-time performance in August
Bamboo Airways led Vietnamese airlines in on-time performance (OTP) in August with an average rate of 95.6 percent, according to the Civil Aviation Administration of Vietnam (CAAV).
The CAAV reported that between July 19 and August 18, Bamboo Airways operated 2,040 flights, of which 1,950 took off and landed in on time. The airlines’ OTP was higher than the sector’s average rate in the month at 89.6 percent.
Bamboo Airways has taken the leading position in the field consecutively since May. In July, it recorded an OTP rate of 95.4 percent.
Vietnam Airlines came second with an average OTP rate of 90.5 percent, followed by Pacific Airlines (formerly Jetstar Pacific) and Vietjet Air at 88.8 percent and 86.3 percent, respectively.
The agency pointed to six major reasons behind the delay and cancelation of flights, including equipment and services at the ports, aviation management, weather conditions, airlines’ operations, and late return of aircraft.
Experts held that in the context of complicated developments of the COVID-19 pandemic and the repairing of Noi Bai and Tan Son Nhat International Airports, the high OTP of airlines showed their considerable efforts.
A representative from Bamboo Airways said that the carrier has strictly followed epidemic preventive measures in accordance with standards of the Health Ministry and the CAAV.
Passengers have been advised to abide by regulations in pandemic prevention and control, including wearing face masks throughout the flights and conduct health declarations, said the representative./.
ADB pledges to double loan commitments to Indonesia
The Asian Development Bank (ADB) has pledged to double loan commitments to Indonesia this year to facilitate economic recovery in one of its biggest client countries.
ADB Country Director Winfried F. Wicklein said on August 19 that the bank usually commits 1 billion USD to 2 billion USD each year for Indonesia, mostly in infrastructure projects, particularly those related to energy.
However, in the face of COVID-19, ADB is stepping up in support and will more than double it this year, he said during a webinar held by state-owned geothermal energy company PT Geo Dipa Energi and infrastructure financing guarantee agency PT Penjaminan Infrastruktur Indonesia.
He also called on the Indonesian government to invest in renewable energy as part of the country’s economic recovery plans. ADB is particularly supportive of geothermal power, which the Manila-based lender considers ideal to spur even growth across the archipelago.
ADB, a self-described leading financier of geothermal projects in Indonesia, recently approved 300 million USD to expand geothermal power plants in Dieng of Central Java province and Patuha of West Java province.
ADB adds to a list of organisations, including the Paris-based International Energy Agency (IEA) and Jakarta-based Institute for Essential Services Reform (IESR), that have explicitly called for the Indonesian government to invest in a green economic recovery.
Indonesia, which holds the world’s largest known geothermal reserves, only harnessed 8.9 percent of its total 23.9 gigawatts of geothermal potential last year, according to official data./.
Monday, August 24 2020Farmers escape poverty thanks to custard apples
Growing custard apples has helped poor farmers in northern Vĩnh Phúc Province escape from poverty in recent years.
Previously, farmers in Bồ Lý Commune of Tam Đảo District just planted the fruit tree in their fields and gardens.
After many years of experience, they found the trees were suited to the climate and soil conditions so they decided to grow the trees on large scale at the feet of mountains and hills.
The people then started to apply science and technology to their farming work, so the custard apples of Bồ Lý Commune have good quality and are favoured across the country.
“Previously, the custard apples in Bồ Lý Commune used to be mainly grown in small gardens because they were not identified as main crops bringing high incomes to locals,” said Trần Nam Thanh, the commune People’s Committee chairman.
“Over the past 10 years, when the fruits were more and more known and loved by many customers, the area of the tree cultivation was extended year by year,” said Nam.
Many rice fields which had low productivity were shifted to custard apples, Nam said.
Today, about 300 households in the commune grow the trees on a total area of 120ha, double the figure of five years ago.
“Bồ Lý is a poor mountainous commune. The terrain is divided, causing difficulties for agricultural production,” said Đỗ Xuân Hoan, chairman of the commune’s farmers’ association.
“However, thanks to knowing how to exploit the potential, the Bồ Lý people boldly converted the crop structure to put the custard apples in commodity production,” said Hoan.
Many households of the commune have escaped from poverty thanks to the fruit.
The economic efficiency from the fruit is calculated to be 5-7 times higher than growing rice, corn and beans.
The commune is now covered with the green of the trees.
Unlike planting and taking care of the fruits previously, now the farmers have been guided to apply cultivation techniques such as fertilising, watering, trimming, and pollinating so the productivity is much higher.
The fruit tree will bear fruits for the first time two years after being planted and from the third year on, the trees bear fruit continuously.
Thus, comparing to other fruit trees, the custard apple tree requires quite a short time.
According to Hoan, the custard apple trees grow thicker than other perennial fruit trees and each hectare can hold 800 trees.
However, in Bồ Lý Commune, the trees are sparser due to the hilly areas.
Thanks to these techniques, custard apple-growing households can earn about VNĐ100 million (US$4,300) per crop.
Bùi Huy Hoàng in Trại Mái Hamlet has 1,400 trees and last year, the trees got their first fruits and he earned VNĐ60 million (US$2,600). This year, his family expects to get VNĐ150 million (US$6,500) for the crop.
The price of the fruit ranges from VNĐ45,000 to 75,000 (US$1.9-3.2) per kilo.
According to Trần Thị Ngọc Bảo, a trader of Bồ Lý Commune, at the peak of crop, she could buy 1.3-1.4 tonnes of the fruit a day.
The development of custard apple trees on the hilly land in Bồ Lý Commune has helped reduced poverty in the area.
In May 2018, the Bồ Lý custard apples were granted a certificate of trademark registration by the National Office of Intellectual Property of Việt Nam.
This helped increase the fruits’ values and create opportunities to expand markets.
Footwear businesses adapt to pandemic
The leather and footwear industry is having to find new supply and demand sources to overcome difficulties due to the impact of the COVID-19 pandemic.
Seventy per cent of raw materials for domestic leather and footwear production are imported from China, according to Phan Thi Thanh Xuan, general secretary of the Viet Nam Leather, Footwear and Handbag Association (Lefaso).
Therefore, the pandemic has caused difficulties for domestic leather and footwear enterprises.
Many businesses have sought material sources from other markets such as India, Europe, Singapore, and Japan to maintain production.
Along with the diversification of raw material sources, leather and footwear companies have been more active in finding partners.
Many businesses shared that some markets in Europe and Japan had shown signs of recovery with the disease better controlled.
The Viet Nam – EU free trade agreement (EVFTA), which took effect from the beginning of this month, also helped leather and footwear businesses expand markets and get more orders, said Xuan.
The pandemic was still complicated, but if enterprises worked hard to find partners and improved their competitiveness, the opportunities would still be great, said experts.
Businesses and experts said that trade promotion activities, as well as support from management agencies, should be further promoted.
The Lefaso general secretary said the leather and footwear industry needed to overcome weaknesses in chain linkage.
She also recommended a separate decree for the leather, footwear, textile and garment industry to develop the fashion industry in the country.
The report on industrial production and trade activities in the first seven months of this year of the Ministry of Industry and Trade found the production of leather and related products increased by 7.6 per cent last month compared to the previous month but was down 4.4 per cent over the same period last year.
It decreased by 4.2 per cent in the first seven months of the year compared to the same period last year.
Footwear export turnover of all kinds was estimated at US$9.53 billion in the seven months, a year-on-year drop of nearly 8 per cent.
Imports of raw materials for the industry also reduced by 14.1 per cent in the first six months.
Viet Nam aiming for a transparent and legal wood industry
Viet Nam is aiming to build a transparent and legal wood industry to support exports of timber products and bolster the domestic timber manufacturing industry.
The need emerges as Viet Nam becomes one of the world’s largest exporters of wood and wooden products, putting it under scrutiny from major trading partners.
In June, the US Department of Commerce (DOC) initiated an investigation into tax evasion for plywood products imported from Viet Nam and suspected use of Chinese materials.
Other major importers of Vietnamese timber products including the European Union (EU), China, Japan and the Republic of Korea are also eyeing stricter traceability regulations to ensure legal timber origins.
To facilitate exports of this key product, Viet Nam is trying to build the Viet Nam Timber Legality Assurance (VNTLAS) system along with the early issuance of EU Forest Law Enforcement, Governance and Trade (FLEGT) licence for exports of wood products to the EU market.
Joining the EU in implementing the FLTGT Voluntary Partnership Agreement on Forest Law Enforcement, Governance and Trade (VPA/FLEGT) will not only promote exports of Vietnamese wood products to the EU but also increase prestige and open doors to other markets.
The agreement is in line with Viet Nam’s Law on Forestry, both prohibiting the import, export, exploitation, processing and trading of illegal timber.
“Boarding the VPA/FLEGT ship with the EU would take the domestic timber manufacturing industry to another level”, said Ngo Sy Hoai, Vice President, Secretary-General of Viet Nam Timber and Forest Product Association (VIFORES).
Beneficiaries would include more than 3,000 processing and exporting enterprises, 340 craft villages and approximately 1.4 million forest farmer households.
According to Hoai, most Vietnamese firms processing and exporting timber to the EU can meet these standards.
“This action would only systematise what the industry has been doing, now placing everything under a legal framework for transparent enforcement,” he said.
To fully implement VPA/FLEGT, the Ministry of Agriculture and Rural Development (MARD) has completed a draft decree for implementing the Viet Nam Timber Legality Assurance to submit to the Government for promulgation.
VNTLAS is a national system to ensure compliance with legal timber legislation at each stage of the supply chain, including harvesting, importing, purchasing, selling, transporting, processing and exporting.
The decree also requires the classification of enterprises into two groups: Group I and Group II. Group I features firms fully complying with legal timber regulations and are not subject to examination and origin verification when filling to export.
VNTLAS works on the basis of enterprises’ self-declaration and self-responsibility through the network of the Enterprise Classification Information System and authority’s verification. This will decrease administrative work for firms while still allowing authorities to keep the origins of timber products in check and encourage enterprises’ responsibility in law enforcement, according to Deputy Minister of MARD Ha Cong Tuan.
Enterprises that do not meet the classification criteria will be subject to the inspection and certification of origin before being granted export licences to the EU.
According to a quick survey conducted by MARD, more than 90 per cent of processing and exporting firms in Viet Nam belong to Group I. Viet Nam aims to have all firms in the wood industry to be classified as Group I.
However, deputy director-general of the Department of Science and Technology and International Cooperation Nguyen Tuong Van has warned that “the most difficult time still lies ahead”.
When the decree comes into effect, but without FLEGT licences, enterprises still have to prove their product origin to be eligible for export.
“Issuance of FLEGT certification for wood exporters to the EU needs to be done as soon as possible,” she added
Besides, the classification of enterprises can only be carried out six months after the implementation of VPA/FLEGT.
“If VNTLAS can be operated at the beginning of 2021, the first FLEGT can only be issued at the end of 2021 or early 2022,” Van said.
Viet Nam shrimp exports to South Korea to edge up: VASEP
Shrimp exports to South Korea are likely to increase by 5 per cent this year due to steady demand, high export prices and tariff incentives under a bilateral free trade deal, the Viet Nam Association of Seafood Exporters and Producers has said.
South Korea is the fifth largest importer of the crustacean from Viet Nam, and accounts for 10.7 per cent of the latter’s total exports.
Though not increasing sharply this year, exports to South Korea have been in positive territory since the beginning of the year. Shipments in the first seven months have been worth US$179 million, a 5.8 per cent increase year-on-year.
In the second quarter they were worth US$91.2 million, up 4.9 per cent, with white-legged shrimp and tiger prawn accounting for 83 per cent and 12.1 per cent.
Under the Viet Nam-South Korea Free Trade Agreement, Viet Nam is exempt from import tax on shrimp in South Korea up to 15,000 tonnes a year. Viet Nam only ships around 2,500 tonnes.
To utilise the opportunity, experts said shrimp exporters need to improve quality and remain abreast of South Korea’s procedures and requirements to overcome technical barriers.
Ho Quoc Luc, chairman of shrimp exporter Fimex Viet Nam, said local authorities need to call for investment in building shrimp farms of international quality, build irrigation and other infrastructure and enable high-quality shrimp production.
Companies must ensure quality and comply strictly with all the terms in their contracts such as delivery time and packaging design, he said.
In recent years Viet Nam has been the leading shrimp supplier to South Korea, accounting for 52 per cent of that country’s total imports.
The key export markets are Japan, the EU, South Korea, China, and the US.
According to VASEP, exports in the first five months of the year were up 2.3 per cent at $1.2 billion, with white leg shrimp and tiger prawn accounting for 69.5 per cent and 19.2 per cent.
Many 3-, 4-star hotels in HCM City on distress sale
Many hotels and motels in the bustling central districts of HCM City are being sold off as the COVID-19 epidemic has caused their business to collapse.
During the first wave of the epidemic, when the country was under social distancing in April, there was some selling or long-term lease.
But since the end of July, when a second wave came, the lack of business and continuing pressure from bank loans are forcing many to sell out.
Many are unable to continue operations, experts said.
In Districts 1 and 3, boards announcing sales can be seen every dozen metres.
On Ly Tu Trong Street in District 1, many three- and four- star hotels are on offer at VND200-1,200 billion (US$8.66-52 million). A four-star property at the intersection with Chu Manh Trinh Street has 18 floors and 150 rooms, and the owner is looking to sell it for VND1.2 trillion, according to Tran Trung Hieu, its manager.
That price is 15 per cent lower than before the outbreak, but it is still hard to find a buyer.
A three-star hotel with 110 rooms near the Phu Dong intersection in District 1 is asking for VND 230 billion or VND 800 million a month if leased, 10 per cent and 20 per cent down from pre-pandemic days, according to Nguyen Trong Tien, its owner.
On nearby streets like Thu Khoa Huan, Le Thanh Ton and Bui Thi Xuan, many hotels are being offered for sale at VND250-400 billion. These are mostly mid-range hotels with more than 50 rooms targeted at middle-class and foreign tourists.
Several hotel chains have had to sell one or more properties to raise money to repay debts.
Prices are much lower than before the outbreak.
A four-star hotel with 80 rooms in HCM City that cost over VND 600 billion before the outbreak can now be bought for VND 400 billion.
Many guesthouses with 10-15 rooms on Bui Vien Street in District 1 are also available to buy or lease.
Nguyen Trong Hoang, the owner of a 11-room property, said: “I invested more than VND 3 billion ($130,000) over a year ago but now want to sell it for VND2 billion ($86,600) or rent it out at VND 35 million ($1,500) a month for five years.
“Before the epidemic the monthly profit was VND 70-90 million ($3,000-3,900).”
Five-star hotels are not doing any better as the number of foreign visitors coming to the city has dropped by 70-90 per cent since the pandemic began in March.
Many have to offer discounts of 70-80 per cent on room rents to attract guests, most of whom are experts coming to the city for work.
Thus, famous five-star hotels like Sofitel, Majestic, Nikko, Oakwood, New World, and Lotte have to rent their rooms at VND1.7-2.5 million ($74-107) per night.
According to surveys, the number of hotels on sale increased by 63 per cent in the second quarter.
Experts said more hotel owners could be selling out because the hospitality market has been down for too long and it would take at least a year to recover.
Vietnam Renewable Energy Week 2020 kicks off
Vietnam Renewable Energy Week 2020 opened in Hanoi on August 25, aiming to promote future sustainable energy development, ensure energy security, remove barriers towards clean energy development, and boost a green economy.
The event, titled “Breakthrough to Recovery and Green Development for A Peaceful Life”, is being jointly held by the Vietnam Sustainable Energy Alliance, the Vietnam Coalition for Climate Action, the Vietnam Union of Science and Technology Associations, and others.
The occasion is set to serve as an ideal platform for relevant stakeholders to provide recommendations to accelerate energy transition in an effective and sustainable manner. It is expected to put forward innovations to make breakthroughs in renewable energy development, climate, and environmental protection policies nationwide.
Nguy Thi Khanh, director of the Green Innovation and Development Center under the Vietnam Sustainable Energy Alliance, said the fifth edition of the event will provide a perfect venue for policymakers, scientists, businessmen, and people to share their respective experiences, whilst devising viable solutions for boosting the country’s clean energy development and green economy.
At the opening ceremony, Cecile Leroy, representative of the delegation of the European Union to Vietnam, said the EU is currently focusing on clean energy and is ready to partner with other stakeholders in an effort to fulfill the goals of developing sustainable energy and a green economy.
She pointed out that the EU has signed numerous cooperation agreements with relevant Vietnamese ministries to boost sustainable energy transformation. She affirmed the EU is willing to provide both financial assistance and expertise to the nation as it strives to develop a green economy.
The event is scheduled to run until August 8.
- VIETNAM BUSINESS NEWS HEADLINES NOVEMBER 2
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