VIETNAM BUSINESS NEWS MARCH 27

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Railway sector expects over 200 mln USD to upgrade weak bridges, tunnels

Railway sector expects over 200 mln USD to upgrade weak bridges, tunnels hinh anh 1

The Vietnam Railways Corporation (VNR) has proposed the Ministry of Transport allocate a total of 4.76 trillion VND (208.1 million USD) to repair and upgrade weak bridges and tunnels so as to increase the capacity of trains and ensure traffic safety.

According to VNR, the national railway network currently has 28 degrading and leaky tunnels which have greatly affected train operation, of which 22 are on the Hanoi-Ho Chi Minh City route, and all built during the French colonial period (1927-1935).

As another 7-trillion-VND project has a plan to repair nine tunnels, VNR proposes allocating funds to repair and upgrade the remaining 13 tunnels with a total estimated capital of 1.9 trillion VND.

On the other hand, it asked for the allocation of 1.16 trillion VND to improve small-radius curves and handle the risk of rolling and falling rocks.

In addition, the agency also asked the ministry to provide about 1.7 trillion VND for the reparation and upgrade of weak railway bridges, and separate rail and road traffic on all road-rail bridges.

Previously, VNR proposed allocate around 2.38 trillion VND to repair and upgrade more than 40 passenger and cargo terminals in the period 2022-2023 in order to improve capacity and efficiency for road transport, thus facilitating transport recovery to after severe impact of the COVID-19 pandemic.

Vietnam sets goal of 18.5 billion USD for wood exports in 2025

Vietnam’s exports of wood and wooden products are expected to rake in 18.5 billion USD in 2025 and 20.4 billion USD in 2030, per a project freshly approved by Deputy Prime Minister Le Van Thanh on March 10.

The 2021-2030 project on the wood processing industry’s sustainable development aims to turn the sector inro a key economic one and promote the trademark of Vietnamese wood products domestically and internationally.

Accordingly, the value of wood and wooden products for export is set at 20 billion USD in 2025 and 25 billion USD in 2030 while that for domestic consumption 5 billion USD and 6 billion USD, respectively. All wood and wooden products for export and domestic consumption are expected to source from legal wood materials with sustainable forest management certification.

Toward these targets, a key task of the project is to develop infrastructure and expand production scale. As such, it will work to form five high-tech forestry areas, attracting investment from wood processors and auxiliary materials producers. It also eyes the building of a national furniture exhibition center and encourages the establishment of centers for research and design of wood products catering to consumers’ demand.

Another task is to develop groups of products with competitive advantages, value added, and high and stable demand in the market. Those prioritised for production include furniture, outdoor furniture, and artificial wood plank products, among others.

The US, Japan, the Republic of Korea, the EU, and China are identified as main markets for Vietnamese wood products, while wood processing firms are encouraged to use the “Go Viet” (Vietnamese wood) trademark and capitalise on e-commerce and other technological applications.

WB pleges to support Vietnam to become high-income economy by 2045

World Bank (WB) Regional Vice President for East Asia and Pacific Manuela V. Ferro on March 25 concluded her five-day visit to Vietnam.

During her first visit to Vietnam, Ferro had a meeting with Prime Minister Pham Minh Chinh, National Assembly Chairman Vuong Dinh Hue, and other senior officials of Vietnam.

During the meetings, both sides discussed development priorities and challenges of Vietnam, as well as how the country can use support of the World Bank to achieve transformational and tangible improvements in the lives of the Vietnamese people.

A highlight of the visit is the agreement between Ferro and PM Chinh to jointly produce a report – Vietnam 2045 that will outline a roadmap and solutions for Vietnam to realise its aspiration of becoming a high-income economy by 2045.

The report will take stock of the pace of reforms laid out in 2016’s Vietnam 2035 roadmap, analyse how Vietnam’s economic trajectory has been affected by the COVID-19 pandemic and other global mega-trends, and provide recommendations to inform policy reform discussions leading up to the 14th Party Congress, scheduled for 2026.

Ferro underlined the progress in the partnership between Vietnam and the WB, adding that the WB will propose innovative solutions that address new development challenges and fit the unique profile of Vietnam’s development opportunities.

At her working session with the Vietnamese Government leader, Ferro pledged that the WB will assist Vietnam to realise its goals of becoming a high-income economy by 2045 and reaching net zero emissions by 2050.

The WB Vice President also visited Ho Chi Minh City to expand cooperation between the bank and the city, the largest economic hub of Vietnam.

During her working session with Chairman of the municipal People’s Committee Pham Van Mai, the two sides discussed major challenges facing the city during the post-pandemic economic recovery and measures to mobilise brainpower and financial resources from the WB to improve its competitiveness. A joint working group between the WB and the city was also set up to sketch out cooperation plans for following years.

The World Bank’s current portfolio in Vietnam consists of 33 projects, worth a total of 5.72 billion USD focused on transforming livelihoods and increasing infrastructure’s resilience to climate risks, education, health care, transport, energy, water resource management, and urban resilience.

Since its comback to Vietnam in 1994, the WB has committed a total of more than 25.3 billion USD toward financing Vietnam’s development.

Vietnam, RoK seek to boost strategic partnership

The Meet Korea 2022 was held in Sam Son city in the central province of Thanh Hoa on March 25 with the participation of more than 500 delegates representing ministries, central agencies and 10 northern localities as well as businesses from Vietnam and the Republic of Korea (RoK).

Addressing the event, Deputy Foreign Minister Nguyen Minh Vu said that this is the first event to open a series of activities to mark the 30th anniversary of the Vietnam-RoK diplomatic relations, aiming to bolster bilateral investment partnership.

He highlighted that the Vietnam-RoK relationship is in a thriving period, with the RoK being an important partner of Vietnam in many areas, and Vietnam being an important pillar of the RoK’s New Southern Policy Plus.

Currently, the RoK is the biggest investor in Vietnam with 9,223 underway projects worth 74.7 billion USD. It is Vietnam’s second largest labour export market and the third largest trade partner, with two-way trade reaching 78 billion USD in 2021, he noted.

According to Vu, localities of the two countries have signed about 80 memoranda of understanding across various areas including trade, investment, people-to-people exchange, agriculture, education-training, and labour.

The RoK has provided Vietnam with nearly 1.4 million doses of COVID-19 vaccines, reflecting the close friendship between the two nations, he said.

He expressed belief that the bilateral partnership will further thrive towards the target of 100 billion USD in 2023 and 150 billion USD in 2030.

Speaking at the event, RoK Ambassador to Vietnam Park Noh-wan said that he hopes the event will be the opening for a new development period of the strategic partnership between the two countries as well as between the RoK and Thanh Hoa, northern and northern central localities of Vietnam.

He diplomat said that 2022 is a meaningful year for both sides when they will celebrate their 30th anniversary of diplomatic relations.

He said he hopes through the event, businesses of both sides will strengthen their investment partnerships in all fields, including high technology, human resources development, support industries and logistics, thus contributing to promoting the growth of Vietnam.

Within the event’s framework, participants discussed measures to boost bilateral trade and investment partnership for the economic recovery and development in both sides, as well as priorities of Korean firms and their interest in the energy sector in Vietnam.

Thanh Hoa province wants to enhance cooperation with Korean partners

The central province of Thanh Hoa hopes to step up its cooperation with partners from the Republic of Korea (RoK) in the building smart cities and e-governance, education and health care, and receive more ODA projects from the country, said a provincial leader.

Do Trong Hung, Secretary of the provincial Party Committee, said cooperation between Thanh Hoa and the RoK’s localities, agencies, organisations and enterprises have developed continuously, adding the RoK has become an important partner of Thanh Hoa in various fields.

Thanh Hoa will create the best possible conditions for Korean businesses and partners, Hung pledged.

The RoK is running 37 FDI projects and joint ventures with Japan in the central province of Thanh Hoa, with total registered capital of over 3 billion USD, accounting for 26.5 percent of FDI projects in the locality.

The RoK government has also launched five ODA projects in Thanh Hoa, worth some 135 million USD, focusing on health care, education, transport and urban development.

Many of the projects are operating successfully, notably the 1,200 MW Nghi Son 2 BOT Thermal Power Plant with investment of nearly 2.8 billion USD, half of which comes from the Korea Electricity Corporation.

The first turbine of the plant has been put into operation, churning out around 3.9 billion kWh each year. The second turbine is scheduled to be operational in July.

According to Jubok Lee, Deputy General Director of Nghi Son 2 Power Limited Liability Company, Thanh Hoa has taken solutions to help the company deal with difficulties during the construction, thus ensuring the project progress.

Apart from the RoK-invested projects, 88 enterprises in Thanh Hoa have also exported their products to the RoK, with a combined value of more than 408 million USD last year.

Thanh Hoa and Seongnam city of the RoK’s Gyeonggi province have also maintained their friendship through cooperation documents since 2013, covering such spheres as economy, technology, infrastructure development, people-to-people diplomacy, development assistance and humanitarian aid.

Between 2013 and 2017, Seongnam’s authorities provided Thanh Hoa with 290,000 USD through non-governmental organisations to help the province upgrade infrastructure in local schools. In 2021 alone, the RoK city financed 13 projects valued at 1.84 million USD in Thanh Hoa.

Air transportation of int’l passengers, cargo rebounds strongly in Q1

Vietnamese airlines have seen a surge of 441 percent in international passengers but a decline in domestic passengers in the first quarter of 2022, according to the Civil Aviation Authority of Vietnam (CAAV).

In a report sent to the Ministry of Transport, CAAV said Vietnamese airlines have transported an estimated 141,600 international passengers and 38,000 tonnes of international cargo in Q1, respectively soaring 441 percent and 113.9 percent year on year.

Airports nationwide handled 321,000 international passengers and 292,000 tonnes of international cargo during the period, up 176.2 percent and 21.1 percent.

Meanwhile, the carriers served about 6.5 million domestic passengers and 48,400 tonnes of domestic cargo, down 12.5 percent and 8.8 percent from a year earlier.

About 13 million domestic passengers and 98,000 tonnes of domestic cargo passed through Vietnamese airports during the three months, dropping 13.3 percent and 5 percent, respectively.

CAAV said as of March, there are 23 foreign and Vietnamese airlines operating air routes between Vietnam and 20 countries/territories.

Compared to 2019 – before the COVID-19 pandemic broke out, regular air routes with eight foreign destinations have yet to be resumed, namely Brunei, India, Indonesia, Myanmar, Macau, Finland, Italy, and Switzerland.

Airlines are operating 67 routes to/from Vietnam, mostly to/from Noi Bai and Tan Son Nhat international airports.

Sixth Int’l Conference and Exhibition on Control and Automation to be held in April

The sixth Vietnam International Conference and Exhibition on Control and Automation (VCCA) will take place in Ho Chi Minh City from April 8-9, heard an online press conference on March 25.

The event, themed “Automation in the Vietnam National Digital Transformation Program: Intelligent and Innovative”, is expected to help develop the control and automation fields during the industrialisation and modernisation process.

It will comprise of three main activities: a scientific conference, an international exhibition and a business forum.

The conference will gather prestigious Vietnamese and foreign scientists who will introduce their research results and exchange experience in relevant fields.

The VCCA has been held biennially since 2011. Last year, it was cancelled due to the COVID-19 pandemic.

HCM City to bolster digital transformation for economic recovery

Ho Chi Minh City has identified promoting all-round digital transformation as one of the important tasks to recover and develop the local economy this year.

The city’s digital transformation programme, issued in July 2020, sets a target that the digital economy will make up 25 percent of its gross regional domestic product (GRDP) by 2025 and 40 percent by 2030. It gives priority to 10 sectors, namely health care, education, transport, finance – banking, tourism, agriculture, logistics, environment, energy, and human resources training.

HCM City also looks to raise the digital economy’s proportion in GRDP to 15 percent in 2022.

Speaking at a seminar on March 25, Director of the municipal Department of Information and Communications Lam Dinh Thang said while the COVID-19 pandemic hasn’t been over, HCM City’s economy is still facing an array of considerable difficulties and challenges.

The city views implementing all-round digital transformation and developing a digital economy as one of the important tasks to recover and develop its economy. Besides, it will also step up digital society, digital administration, and smart city building, he noted.

Some experts suggested that in terms of digital infrastructure, HCM City should complete general and specialised databases in its smart city project, boost the building of information security mechanisms to encourage enterprises to do business on digital platforms, and pay due attention to cybersecurity.

Regarding digital business, they recommended the city survey companies’ demand and devise different programmes supporting firms to innovate, apply technology, and shift to digital business models.

Italy-Vietnam Chamber of Commerce to launch representative office in Vietnam

The Italy-Vietnam Chamber of Commerce (CCIV) will open a representative office in Ho Chi Minh City in June to support Vietnamese and Italian firms to seek partnership, according to its President Fulvio Albano.

This year, the Turin-bases CCIV will work closely with the Vietnamese Embassy in Italy and the Honorary Consul of Vietnam in Turin to promote bilateral cooperation in economy, trade and service, with tourism being a prioritised sector, Albano told the Vietnam News Agency on March 24.

In the time to come, the CCIV plans to organise a series of bilateral events in Turin, including the arrangement of a visit by officials from the Vietnamese Embassy to Turin and Piedmont region and the introduction of Vietnam’s business and investment potential to Italian firms, he said.

Founded in 1996, the CCIV is one of the first bilateral chambers of commerce set up in Italy and recognised by the Italy’s Ministry of International Trade, which is the Ministry of Economic Development now. It is a member of the union of chambers of commerce (Unioncamere) of Italy.

VietinBank wins two major IFC prizes on trade finance

The Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) received two great prizes granted by the International Finance Corporation (IFC) for three consecutive years.

The IFC is a member of the World Bank Group and chose to award VietinBank two prizes on March 23, including “Best Issuing Bank Partner in East Asia and the Pacific” and “Best Bank Partner for Climate Trade in East Asia and the Pacific”.

The award is a recognition of the IFC for VietinBank’s contribution to the IFC’s Global Trade Finance Programme (GTFP) which aims to support the extension of trade finance to clients globally who are typically underserved by the banking system.

The scheme began 17 years ago and has so far seen programme include more than 500 bank partners across nearly 100 emerging-market countries.

SOEs to spearhead recovery and national development

State-owned enterprises (SOEs) are to spearhead the country’s economic recovery post-pandemic, to modernise and play a key role in national development efforts, Prime Minister Pham Minh Chinh told government officials and SOEs’ executives during an online conference yesterday.

“SOEs hold key resources and are important economic drivers in Viet Nam’s socio-economic development strategy,” said the PM.

The government leader said Viet Nam’s SOEs have grown by leaps and bounds in the last three decades of economic reform to form key pillars of the economy, especially during the pandemic.

He said priorities for SOEs in the near future are to identify limitations and shortcomings of current policies that hinder business performance. He said each and every SOE must find their way to initiate reform, address ongoing issues and find solutions.

Chinh said many SOEs have not been able to fully realise their potential as well as make the most out of the resources at their disposal. He urged SOEs’ executives to find ways to improve business performance, to assist the local economy and to stay focused on their key industries.

He said SOEs must pay more attention to the quality of human resources and the role played by central government agencies in charge of managing the State’s shares.

Regarding the process of equitisation and reducing State capital in SOEs, he asked for a comprehensive study of ongoing problems including land-use evaluation, brand recognition and the public’s reaction to said problems.

He said there have been mixed results in implementing reforms and managing SOEs’ assets over the years. It’s perhaps time for the government to hold executives personally responsible for weak performance, delays and failure to cooperate with governmental agencies to find solutions in a timely manner.

Chinh said they should be made top priorities, especially in the face of rising geopolitical risk levels, trade tension and the unpredictable COVID-19 pandemic. More than ever, SOEs must focus on building feasible action plans to improve productivity, competitive ability, sustainability and resilience to climate change.

Speaking at the conference, minister of planning and investment Nguyen Chi Dung said the adoption and development of technology and innovation should be made the highest priority for Viet Nam’s SOEs as well as the implementation of breakthrough policies for key sectors of the economy.

“We must introduce strong policies to unleash the economic potential of SOEs, allowing for greater contribution to national development,” said Dung.

According to a report by the Ministry of Investment and Planning, there were nearly 500 SOEs in Viet Nam with the State being either sole stakeholder or major stakeholder, of which 94 were large-sized enterprises.

While accounting for just 0.08 per cent of the economy, SOEs with the State being the sole stakeholder controlled a significant amount of available resources with up to 7 per cent of total assets and 10 per cent of the total capital of the entire economy. On average, said SOEs held more than VND6 trillion in assets, roughly 18 times the size of an average foreign-invested enterprise and nearly 140 times the size of an average enterprise.

The upside is many of such SOEs have been able to take advantage of the enormous resources available to them and managed to build strong products under internationally recognised brands in key industries such as telecommunications, transport, seaport and logistics.

Many of which have been consistently producing strong business performance with average pre-tax profit growth at 4.87 per cent annually in the 2016-20 period, significantly higher than that of the private sector at 1.26 per cent. They also accounted for 28 per cent of all contributions, taxes and fees, to the State’s coffer and employed nearly 700,000 workers or 7.3 per cent of all employment.

The ministry reported SOEs accounted for up to 29 per cent of the entire country’s GDP in 2020. SOEs were holding onto a dominant share in major up-and-coming markets such as energy, telecommunications and banking.

Bac Giang looks to boost ‘Thieu’ lychee sales in high-standard markets

The northern province of Bac Giang has been promoting the sales of thieu lychee in domestic and foreign markets, including high-standard ones, according to Vice Chairman of the provincial People’s Committee Phan The Tuan.

Bac Giang is set to produce 160,000 tonnes of thieu lychee in 2022, including 112,000 tonnes meeting VietGAP standard and 1,000 tonnes meeting GlobalGAP standard.

The locality will plant 218ha of the fruit in 18 coded-cultivation areas, aiming to produce 1,600 tonnes for export to high-standard markets such as the European Union and the US.

It also plans to produce 1,800 tonnes to export to Japan in 30 planting zones granted with codes; and about 95,000 tonnes in 149 other coded-cultivation areas to ship to China.

According to the provincial Department of Agriculture and Rural Development, the thieu lychee output in 2022 is forecast to exceed the set plan.

The locality’s agriculture sector will focus on monitoring and forecasting the risk of pests and diseases, supervising and managing the cultivation in thieu lychee producing areas, especially those for export.

Bac Giang will export the first batch of thieu lychee in 2022 to the US and Japan on May 18, and organise a series of events and conferences to promote sales of the specialty fruit and other key products of the locality in May and June.

The province will continue to encourage the application of advanced cultivation techniques for better fruit quality and higher value.

Instant noodle prices rise

Manufacturers have raised the prices of a series of food items due to pressure from the skyrocketing cost of gasoline and input materials.

Rice, sugar, fish sauce, cooking oil, and instant noodle manufacturers have all announced increased prices.

The price of instant noodles has increased by 25 per cent over the same period last year while other items such as cooking oil rose by 23 per cent, sugar 67 per cent, fish sauce 28 per cent, and gasoline 48 per cent.

Kajiwara Junichi, general director of Acecook Viet Nam JSC, said that the company had to increase the price of all products from March 1 due to the high price of input materials and transport costs, adding that no matter how hard businesses tried, they could not keep prices down.

A survey of the World Instant Noodles Association (WINA) showed that Vietnamese people consumed more than 7 billion packages of instant noodles in 2020, just behind China and Indonesia.

The COVID-19 pandemic spurred the need to hoard and consume instant noodles. WINA estimated that the world’s demand for instant noodles grew by 14.79 per cent in 2020.

In Viet Nam, their price rose by 29 per cent, nine times higher than average growth in 2015-2019.

The Vietnamese instant noodle market currently has 50 domestic and foreign enterprises, but is dominated by three main players: Acecook, Masan Consumer and Asia Food.

Quang Binh pledges to create favourable environment for investors

Quang Binh is calling for investment in agriculture, tourism, industry, and infrastructure to create a driving force for the central province’s socio-economic growth, promising to create the best possible conditions for investors.

This was the highlight of the Quang Binh Investment Promotion Conference held by the provincial People’s Committee in HCM City on Friday.

In an interview with Dau Tu (Investment) online newspaper, Provincial Party Secretary Vu Dai Thang said that Quang Binh Province welcomed all investors and would not have any discrimination. He stressed that enterprises and investors coming to Quang Binh would all receive companionship from administrative management agencies of all levels.

Ho An Phong, Deputy Chairman of the provincial People’s Committee said that Quang Binh wished to attract investments in sectors of the province’s strengths, including tourism, industrial production, hi-tech agriculture, wood processing, and infrastructure development.

Phong added that priorities would be given to projects which would contribute to promoting socio-economic development and at the same time ensuring environmental protection for sustainable development.

At the conference, Quang Binh was calling for investment in 23 projects in the 2022-24 period, including six in agriculture, seven in tourism and services, six in industry and industrial zone infrastructure development, and four in socio-economic infrastructure development.

Le Hoang Chau, President of HCM City Real Estate Association, said that Quang Binh had large potential for investment in tourism property.

Jean Jacques Bouflet, Vice Chairman at EuroCham Vietnam, said that Quang Binh’s effort to create favourable investment environment together with the province’s tourism potential would be opportunities for European investors.

Quang Binh is a coastal province in the central region of Viet Nam, 500km from Ha Noi and a one and a half hour flight from HCM City.

Source: VNA/VOV/VNS/SGT/Dtinews

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