VIETNAM BUSINESS NEWS FEBRUARY 22

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Export-import turnover hits $21.41 bln in first half of February

Export-import turnover hits 21.41 bln USD in first half of February hinh anh 1

Export-import turnover hit 21.41 billion USD in the first half of February, according to the General Department of Vietnam Customs. The country raked in 8.75 billion USD from exports in the period.

Three groups of commodities recording the highest export turnover were phones and components; computers, electronic products and components; and machinery and equipment.

Meanwhile, Vietnam spent 12.66 billion USD on imports during this period, with the two groups valued at over 1 billion USD being computers, electronic products and components; and machinery, equipment, tools, and spare parts.

As of February 15, the country’s total import-export turnover reached 81.68 billion USD, the department said.

As a result, Vietnam posted a trade deficit of nearly 4 billion USD in the first half of February, and 2.5 billion USD in the period from the beginning of the year to February 15.

Investment capital for Thu Thiem-Long Thanh light railway allocated

The capital allocation has been addressed to speed up progress of construction project of the Thu Thiem-Long Thanh light railway from this year.

The Ministry of Transport on February 18 has proposed the Prime Minister to allow the People’s Committee of Dong Nai Province to implement the construction project. Because the rail line will run through HCMC, the province and HCMC must come to an agreement before submitting the report to the Prime Minister in accordance with the Investment Law.

The Thu Thiem-Long Thanh light railway has a length of 38 kilometers, starting at the Thu Thiem station in Thu Duc City of HCMC, and ending at the Long Thanh International Airport in Dong Nai.

The project cost is estimated at more than VND40.5 trillion (US$1.77 billion). It will be built under the public-private partnership (PPP) format and expected to be completed by 2030.

The rail line is one of the important projects aiming at strengthening transport infrastructures to connect with Long Thanh Airport.

Vietnamese overseas investment soars in January

Local enterprises invested a total of US$36.9 million abroad in January, representing a 11.7 fold-increase compared to the same period from last year, according to figures given by the Ministry of Planning and Investment.

During the course of this period, firms received investment licenses for 15 projects worth roughly US$44.2 million, an increase of 14 times against last year’s corresponding period.

Of the figure, US$9.19 million was added to one project, while another project was adjusted to decrease capital by a total of US$16.4 million.

Capital outflows were mainly poured into nine industries, with the mining sector taking the lead with a new project capitalized at US$35.54 million, followed by the financial and banking sector with US$9.19 million, in addition to the wholesale and retail and transportation and warehousing sectors.

Most notably, Laos was the largest recipient of Vietnamese overseas investment in the reviewed period, making up 25% of the country’s overall investment abroad with US$48.23 million, trailed by the United States with over US$7.8 million, China, the Republic of Korea, and Japan.

As of January 20, the nation had 1,463 valid overseas investment projects with a total investment capital of over US$20.9 billion.

Cashew sector forecast to enjoy export growth in 2022

The cashew nut export target of US$3.8 billion for this year set by the Ministry of Agriculture and Rural Development (MARD) may be achievable given the forecast of high demand for the product in the near future, according to industry experts.

The enforcement of major free trade agreements (FTAs) such as the EU-Vietnam Free Trade Agreement (EVFTA), the UK-Vietnam FTA (EVFTA), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), has also brought about more chances for local products to access the European, America, and Chinese markets.

According to the Vietnam Cashew Association (Vinacas), the cashew nut market is predicted to witness an annual surge of 4.6% throughout the 2021 to 2026 period. In terms of Vietnam, the market is expected to hit US$7 billion in 2025.

Last year represented a successful year for the Vietnamese cashew sector with an export volume of 579,800 tonnes and a value of US$3.64 billion, annual rises of 12.6% and 13.3 %, respectively.

The highest growth in terms of cashew export earnings was seen in the African market with 35%, followed by the Asian market with 24%. In addition, Vietnamese cashew took 22% of the market share in Europe and 23% in the United States, and even 89% in the Chinese market.

Petrol prices rise to all time-high

The retail prices of petrol and oil continued to witness an increase as of 3 p.m. on February 21 following the latest price review jointly conducted by both the Ministry of Industry and Trade and the Ministry of Finance.

This marks the fifth consecutive hike in petrol prices and is the fourth increase in 2022.

The latest review sees the price of E5RON92 biofuel go up by VND961 to a maximum of VND25,531 per litre, while the price of RON95-III edged up slightly by VND965 to VND26,285 per litre.

Elsewhere, the prices of diesel 0.05S and kerosene were capped at VND20,800 per litre and VND19,500 per litre.

Furthermore, Mazut 180CST 3.5S is to be sold at no more than VND17,930 per kilogram.

Moreover, the two ministries also decided to use VND250 per litre from the petrol price stabilisation fund for E5RON92, with VND400 per litre being used for diesel. In addition, that of mazut is VND300 per kilogram.

Both the Ministry of Industry and Trade and the Ministry of Finance are now in the process of reviewing and adjusting domestic petrol and oil retail prices every 10 days on a par with global market fluctuations.

VBF official highlights prospects of circular agriculture

New initiatives, smart production concepts, new farming models, digitisation, more efficient logistics and a greater focus on circular agriculture and responsibility for the environment will be highlights for this year, said David Whitehead, head of the Vietnam Business Forum (VBF) Agri-Business Working Group at the annual VBF dialogue in Hanoi on February 18.

Whitehead underlined the need for the agricultural sector of the world in general and Vietnam in particular to renovate, with farmers becoming investors in the field.

He said that large-scale farmers should stay in office and check all information provided through sensor systems and advanced technologies to monitor the use of water, fertilizer, animal feed and environmental impacts from their production activities.

According to Minister of Agriculture and Rural Development Le Minh Hoan, the agricultural sector will focus on developing circular agriculture to minimise waste and environment impacts, improve productivity and shorten supply chains.

Circular agriculture focuses on using minimal amounts of external inputs, closing nutrients loops, regenerating soils, and minimising the impact on the environment. It will be the key to the effective management of agricultural resources, reducing resource requirements as well as ecological footprints of agriculture.

Rice produced by multi-stakeholder partnership shipped abroad

Loc Troi Group, a leading provider of agricultural services and products in Vietnam, shipped more than 4,500 tonnes of rice worth over 3 million USD to markets in Europe, Americas and Asia in early 2022.

The products, which met all requirements set by each market, were produced with the partnership between farming households and the company.

The cooperation is part of the Loc Troi agricultural ecosystem comprising cooperatives and 1,200 staffers working with rice farmers, which helps raise efficiency, save costs and benefit farming households who engage in the process.

Customs clearance at northern border gates faces difficulties

There are only nine border gates and crossings along the Vietnam-China land border operating after the Lunar New Year festival, causing difficulties for customs clearance for goods, the General Department of Vietnam Customs said.

To deal with goods congestion in northern border gates over the past time, the general department rolled out many solutions to support businesses in customs clearance.

However, there still remain difficulties in customs clearance due to stringent COVID-19 prevention and control measures imposed by China, along with the shortages of trucks and workers.

Given this, the general department has suggested China’s customs agencies facilitate the process at the border gates where all competent forces are working, especially main and auxiliary gates.

It has also called for coordination of Chinese localities, saying more trucks and workers are needed to load and unload goods.

The general department has suggested border localities consider upgrading and expanding infrastructure at the border gates and make reports to authorised agencies for approval.

RoK aids aquaculture productivity enhancement in Vietnam

The Ministry of Oceans and Fisheries (MOF) of the Republic of Korea (RoK) is implementing the first-year technical cooperation project for aquaculture productivity enhancement in Vietnam’s northern provinces.

This is part of the ministry’s official development assistance (ODA) endeavours, the ministry said on February 21.

As a model of interdepartmental collaboration that combines the Korea Forest Service’s ongoing mangrove reforestation efforts, covering 30 hectares for 2020-2024 with a budget of 4.5 billion KRW (3.78 million USD) and the MOF’s aquaculture expertise, the project is expected to restore habitats rich in organic matter through mangrove rehabilitation and create synergy with shellfish farming.

More specifically, through the project, the MOF will modernise aging seed production facilities and idle aquaculture sites in northern Vietnam as well as dispatch Korean aquaculture experts to the region for technology transfer and capacity-building education.

These measures are expected to revitalise aqua farming in the region and raise income levels in local communities.

Project to upgrade rice value chain in Red River Delta launched in Thai Binh

A ground breaking ceremony for a project to upgrade rice value chain in Vietnam’s Red River Delta was held in the northern province of Thai Binh on February 21.

The event was jointly held by the Ministry of Agriculture, Food and Rural Affairs of the Republic of Korea (RoK) and the Ministry of Agriculture and Rural Development of Vietnam.

The project, part of a new framework on agricultural development cooperation between Vietnam and the RoK, will be carried out in Thai Binh, Nam Dinh and Hung Yen provinces until 2024.

The project will be rolled out with a non-refundable assistance worth 5 billion KRW (over 4.5 million USD) provided by the RoK government through its agriculture ministry.

Farm exports boom in new year

Farm exports to difficult markets like Japan, South Korea, Australia, and the EU have been prolific in the first two months of this year, raising hopes for a successful year.

Pham Thai Binh, general director of Trung An Hi-tech Agriculture Joint Stock Company in Can Tho City, said his company has fulfilled five orders for nearly 1,000 tonnes of fragrant rice from Germany, Malaysia and Qatar.

Loc Troi Agriculture Products JSC, a subsidiary of Loc Troi Group, has exported more than 4,500 tonnes of fragrant, white, brown, and glutinous rice varieties worth US$3 million to Europe, the US, the Middle East, and Asia.

Nguyen Van Thu, director of GC Food Company in Dong Nai Province, said his firm shipped a container of aloe vera and coconut jelly on February 7.

His company’s exports have increased by 30 per cent in the first two months of 2022 and it has many more export orders to markets like Japan, Korea and Southeast Asia, he said.

It targets exports of VND350 billion (US$15.2 million) this year, up 67 per cent from 2021.

General secretary of the Viet Nam Fruit and Vegetable Association, Dang Phuc Nguyen, said in January exports of vegetables and fruits to key markets such as Japan, Korea, Russia, Australia, the Netherlands and the US grew by 12-69 per cent.

Vietnamese firms are familiar with the quality and other requirements in these markets, which has helped increase exports significantly, he added.

With the forecast being that in 2022 the Covid-19 epidemic will be full controlled and the global economy will recover, GC Food has invested in modern production lines to double its total capacity to 35,000 tonnes of products a year, Thu added.

Proposed amendments to e-commerce tax declaration and payment

The Ministry of Finance is seeking comments on a new draft decree that provides amendments to Decree No 126 on tax administration and Decree No 123 on invoices.

According to the new draft, e-commerce platform owners must declare and pay tax on behalf of individual sellers for goods and services sold on their platform online.

For goods and services not sold online, the owner must declare and pay tax on behalf of individual sellers, under their authorisation.

The owner is also required to disclose information to tax authorities of traders, organisations and individuals, who have made transactions on their platform.

The information includes the sellers’ names, tax codes, IDs, addresses, phone numbers, and sales revenues of goods and services sold online.

People can make their comments on the draft via the ministry’s online portal.

Three large-scale expressway projects soon to be constructed

Investment preparations are in full swing from the government, relevant ministries, and sectors, regarding highway construction projects during the next five years, focusing on three massive expressway projects undertaken by the Ministry of Transport between Bien Hoa-Vung Tau, Khanh Hoa-Buon Ma Thuot, and Chau Doc-Can Tho-Soc Trang-Tran De.

The prime minister has signed two decisions on founding State Appraisal Council to appraise the pre-feasibility study reports of two expressway projects, namely the ones between Bien Hoa and Vung Tau and Khanh Hoa and Buon Ma Thuot based on proposals from Minister of Planning and Investment Nguyen Chi Dung.

On February 10, Minister of Transport Nguyen Van The had proposed the PM and the National Assembly (NA) decide on investment policies of the three expressways to create a key driving force for development in the southeast region, the Central Highlands, and the Mekong Delta.

Earlier this month, at an online meeting on the preparation for investments in the expressways, Deputy Prime Minister Le Van Thanh assigned the Ministry of Planning and Investment to submit proposals to the PM on the establishment of the State Appraisal Council before February 16.

For the Chau Doc-Can Tho-Soc Trang-Tran De expressway, the State Appraisal Council was established under Decision No.1456/QD-TTg from last September.

The Bien Hoa-Vung Tau expressway has an estimated length of 53.7km. To ensure investment efficiency, phase 1 involves building 4-6 lanes, with a designed speed of 100kmh. Total investment value in phase 1 is about $775 million.

The Khanh Hoa-Buon Ma Thuot expressway will be 117.5km long. Total investment value stands at $953 million.

The Chau Doc-Can Tho-Soc Trang-Tran De expressway will have a length of 188.2km. In phase 1, the project will have four lanes with a designed speed of 80kmh. Total investment value in this period is calculated at $1.92 billion.

Inflation forecast to be under control at under 4% this year

Despite the soaring prices of input materials, including fuel and construction steel, inflation will be well controlled and stand at under 4% this year, said Nguyen Thu Oanh, director of the Price Statistics Department under the General Statistics Office.

The consumer price index (CPI) in January increased by 1.94% year-on-year, posing a potential surge in inflation in 2022, Oanh said, adding that during the first months of the year, the prices of goods in several countries soared, negatively impacting domestic prices.

However, with the Government’s experience in controlling inflation over the past many years and the effective collaboration between departments, agencies, cities and provinces, this year’s inflation will still be under control at under 4% as targeted by the National Assembly, according to Oanh.

Can Tho seeks VND300b from central budget for three projects

The government of Can Tho has proposed the central government allocate an additional VND300 billion to implement three projects in the city this year.

In a proposal recently sent to the Ministry of Planning and Investment, the municipal government said Can Tho would be allocated over VND2.7 trillion from the central budget for 2022 under the Prime Minister’s decision issued in December last year. Of the amount, domestic capital accounts for over VND1.157 trillion, reported Tien Phong newspaper.

In the first project, the city will build and expand the provincial road No.917. For the second project, it will implement the provincial road No.918. The city was allocated VND100 billion for each project and proposed an additional VND100 billion for each.

As for the third project, it was allocated nearly VND111 billion and proposed an additional allocation of VND100 billion to build the provincial road No.921.

Over VND6 trillion needed for Cao Lanh-An Huu expressway

The Cao Lanh-An Huu expressway project linking Tien Giang and Dong Thap provinces in the Mekong Delta region will require over VND6 trillion in investment funded from the State budget, according to a prefeasibility study report of the project submitted to the prime minister by the Ministry of Transport.

The 30-kilometer expressway, part of the Hong Ngu-Tra Vinh expressway, which is 188 kilometers long, will have four lanes, the local media reported.

The ministry proposed beginning site clearance and resettlement processes in the 2022-2023 period, breaking ground for the expressway in 2023 and putting it into operation in 2026.

The project will comprise two subprojects, with the first section 18.2 kilometers in length in Dong Thap Province and the other over nine kilometers in length in Tien Giang Province.

BOT toll stations nationwide witnessing revenue reduction

The Directorate for Road of Vietnam (DRVN) has just announced that the income from BOT toll stations in 2021 only reached VND11,000 billion (US$482 million), a considerable decreased compared to the previous years.

Accordingly, the 54 BOT projects managed by the Transport Ministry last year earned the respective quarterly revenues of over VND3,300 billion ($144.7 million), VND3,140 billion ($137.7 million), VND1,700 billion ($74.5 million), and VND3,000 billion ($131.6 million).

The yearly income of $482 million was a significant drop compared to 2020 (at VND12,500 billion – $548.1 million) and 2019 (at VND13,500 billion – $592 million).

The main reason lies in the severe impact of the Covid-19 pandemic, leading to a great reduction of vehicles using the roads, especially during the social distance time.

In addition, BOT project businesses had to reduce toll for certain subjects as regulated by the current law. For example, DRVN has lately requested BOT project enterprises to decrease the VAT tax to 8 percent in accordance with Decree No.15/2022/ND-CP, issued by the Government on January 28, 2022.

First foreign packaging solutions company enhances nascent recycling industry in Viet Nam

Tetra Pak, a Sweden-based food processing and packaging solutions company, has become the first foreign packaging solutions company investing in promoting the capacity of Viet Nam’s nascent recycling industry.

Accordingly, Tetra Pak will invest €1.2 million in the installation of a €3.5 million-modern production line at Dong Tien Packaging and Paper Company’s recycling factory that separates paper from used cartons in line with European technology standards, expected to be completed in the fourth quarter of this year.

The modern technology line for separating paper from milk cartons is expected to almost double the factory’s capacity to reach 17,000 tons per year.

The new line also enables the production of premium recycled pulp that can be used to make products of high commercial value, such as napkins, toilet paper, and office paper, thereby helping to raise the commercial value of used cartons and income for collectors.

Kien Giang expands large-scale rice fields

The Mekong delta province of Kien Giang set up 20 large-scale rice fields with a total area of 1,600 hectares last year, as part of its effort towards restructuring agricultural production towards sustainability, and increasing quality and added value.

According to Le Van Dung, deputy director of the provincial Agriculture Extention Centre, it has supported the building of 15 establishments that have met Vietnamese Good Agricultural Practices (VietGAP) and Good Agricultural Practices (GlobalGAP) standards on shrimp, rice, durian and mangosteen cultivation. An electronic system of traceability using QR codes for 10 agricultural production chains for production and businesses units, cooperatives and cooperative groups certified with VietGAP standard was set up at the same time.

The centre has also initiated three programmes associated with the sale of rice including large-scale projects meeting raw material region and responding to climate change on 4,800ha, 470ha for rice development and 220ha for organic rice farming. Once taking part in the programmes, enterprises will coordinate with cooperatives and cooperative groups in providing rice seeds and sale.

Vietnam pins high hope on export of phones, components

The export of phones, which contribute annually over 50 billion USD in the last three years, is expected to help Vietnam expand its total export turnover by 6-8 percent in 2022.

Phones and components reported the largest export value the first months of 2022 with 4 billion USD, accounting for 13.8 percent of the country’s total.

Phones are exported to 50 countries and territories worldwide, with China being the biggest importer.

Last year, it recorded a two-digit growth, hitting 58 billion USD, up 12.4 percent compared to 2020.

China and the US were the biggest importers of Vietnam’s phones in the year, spending 15.18 billion USD and 9.69 billion USD, respectively, posting year-on-year surges of 23 percent and 10.3 percent.

Hard nuts to be cracked in digital transformation in tourism

The COVID-19 pandemic has posed big challenges for almost all industries and fields, with tourism among those suffering the heaviest. At the same time, due to the impact of the Fourth Industrial Revolution, with changes in consumer habits, especially after the COVID-19 outbreak, digital transformation has become an indispensable requirement of the industry.

The transformation of Vietnam’s tourism is said to have many barriers due to the uneven quality of workers, low management capacity, and limited digital technology.

In the coming time, in order to remove those barriers, the industry must carry out effective solutions and overcome limitations in terms of finance, human resources, policies, information technology, organisation and management, and cooperation mechanisms.

The top requirement of digital transformation and development of tourism is to have good human resources, as well as a large number of competent experts in information technology. However, the current training system in Vietnam is still quite inadequate in catching up with the trend of talent incubation and human resources development in digital tourism.

Another problem is differences in digital technology between regions across the country. The areas having good conditions for digital transformation in the tourism industry are mostly in large cities and provinces.

Experts say that Vietnam can learn from international experience in building planning, synchronously developing information infrastructure, the Internet of Things, and artificial intelligence in a professional and modern direction, associated with the tourism product value chain. In addition, Vietnam should focus on developing smart cities along with tourism digital transformation infrastructure.

Source: VNA/SGT/VOV/VNN/SGGP/VGP/VNS/VIR

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