A delegation of 13 leading Danish agri-food firms in Solutions for Livestock & Food Production, Food Processing Technologies, Ingredients and Climate Control Solutions is giving expertise to Vietnamese partners
The delegation, which works in areas important for improving agri-food production towards high efficiency, green, and sustainability, expects to share experiences and introduce world-leading and well-proven Danish solutions in agri-food production and look for opportunities to cooperate with Vietnamese companies.
The expertise was shared at during Seminar – Business Matchmaking held in Hanoi and Ho Chi Minh City on August 16-19.
Troels Jakobsen, Trade Counsellor of the Embassy of Denmark said: “Danish companies and experts are very willing to share innovative ideas and technologies with their Vietnamese counterparts as well as look for opportunities to cooperate and make good and sustainable business together.”
“The Vietnam – Denmark cooperation program in agriculture and food has an important impact on the development of Vietnam’s agricultural sector. Vietnamese sector agencies and companies can apply the experiences and knowledge they learned from their Danish partners in their work and businesses,” Phung Duc Tien, Vice Minister of MARD, said at the event in Hanoi on August 17.
The Danish Agri-Food delegation is part of a long-term cooperation between Denmark and Vietnam to support Vietnam’s efforts to transform the agriculture and food sector towards green and sustainability.
$1-billion Lego plant to receive land on September 30
Binh Duong People’s Committee will mobilise its resources to complete the land clearance and handover to the investor of the $1-billion Lego factory on September 30.
The provincial leader asked VSIP JV – a joint venture between Vietnam’s Becamex IDC Corporation and a Singaporean consortium led by Sembcorp Development – and relevant authorities to accelerate the land clearance for the $1-billion Lego factory that the Danish group has invested in. The project is located in the VSIP-III industrial park.
It is expected that 22 hectares of the land will be handed to the investor on August 31 and the remaining 22ha on September 30.
Work on the factory is scheduled to begin this year and it will become operational in 2024 to help Lego expand its global supply chain. The new facility has a total value of more than $1 billion, rendering it one of the largest foreign-invested projects in Vietnam.
Airlines start selling tickets for Tet holiday
Three carriers of Vietnam Airlines Group have announced that millions of tickets would be offered for Lunar New Year (Tet) flights from January 1 to February 5 next year.
Passengers can now buy Tet tickets on the official websites and mobile applications and at ticketing offices of Vietnam Airlines, Pacific Airlines and VASCO.
However, Tet tickets for the HCMC-Hanoi and the HCMC-Danang route during the peak days of December 26-30 are still not available for sale, except single business class tickets valued at nearly VND10 million.
Besides Vietnam Airlines, mid-July saw many Tet tickets for sale on the websites of Vietjet Air and Bamboo Airways.
Vietjet is selling HCMC-Hanoi tickets on January 18, 2023, for over VND2.9 million, a drop against over VND3 million for Eco-class tickets, and over VND4.5 million for Skyboss class tickets in mid-July.
Bamboo Airways has also reduced its Tet ticket prices by VND100,000-200,000 per ticket.
Export growth may be slower than expected in H2: HSBC
Vietnam saw a year-on-year increase of 17% in exports in the first six months, but it will be hard for overseas shipments to meet expectations in the last half of the year, according to the HSBC.
In its “Vietnam at a glance” report released on August 17, it said after the impressive export growth in H1, a slower-than-expected pace has been recorded since the start of H2.
The main cause is a growth slowdown in the electronics industry, especially mobile phones. Samsung’s second-quarter results show that demand for consumer electronics is weakening, thus affecting the smartphone, TV, and other segments.
The HSBC report showed that despite an unpredictable global economic situation, the domestic economy has continued to reap certain successes.
Retail sales posted a record growth rate of over 55% last month compared to the same period last year. In particular, revenue of tourism-related sectors was considerable, witnessing a double-digit expansion for four straight months.
Also in July, Vietnam attracted more than 350,000 foreign tourist arrivals, tripling the monthly average in H1, bringing the total visitors to the country so far to 1 million.
Tra fish exports above expectations
Tra fish (pangasius) exports in the first seven months of the year amounted to US$1.6 billion, nearly the same as the figure in all of 2021 and the forecast for the entire 2022. This higher-than-expected result was attributed to a marked increase in export volume and prices.
A report by the Vietnam Association of Seafood Exporters and Producers (VASEP) showed that the January-July tra fish export value was 79% higher than in the same period last year. In all of 2021, tra fish exports brought in US$1.62 billion.
At a conference on the development of Vietnam’s tra fish farming and processing industry early this year, the Ministry of Agriculture and Rural Development expected tra fish to bring export revenue of US$1.6 billion. The impressive seven-month performance was buoyed by strong rises in demand and prices.
Vietnam welcomes fresh wave of FDI
Vietnam has recently welcomed a new wave of foreign direct investment (FDI) inflows as global companies move to diversify their production chain in the post-COVID-19 period, according to industry insiders.
Despite newly-registered investment suffering a decline, the disbursement of FDI in the country hit US$11.57 billion in the first seven months of the year, up 10.2% on-year.
Foreign-invested businesses have been constantly increasing their investment in the Vietnamese market and expanding projects, thereby highlighting their great confidence in the national economy and the country’s business climate.
Most notably, Samsung Electro-mechanics Vietnam has raised their investment twice, with US$920 million and US$267 million in Thai Nguyen province, while Samsung HCMC Electronics CE Complex Co., Ltd. also moved to increase its capital to over US$841 million.
Furthermore, Samsung has also lifted its capital for three plants manufacturing electronics, network equipment, and multimedia audio products in the localities of Bac Ninh, Nghe An, and Hai Phong, with additional investment of close to US$306 million, US$260 million, and US$127 million, respectively.
Moreover, the northern province of Quang Ninh granted new investment licenses to two projects worth over US$55.5 million on producing solar panels and building factories, warehouses, and offices.
The northern port city of Hai Phong also presented investment licences to six projects with a total investment of VND4.597 billion, as well as five other projects exceeding US$231 million.
Vietnam is anticipated to have the chance to keep up with the trend of shifting global production chains in order to attract foreign capital and develop some new fields in the Vietnamese market, including medical equipment, biology, pharmaceutical chemistry, biochemistry, pharmaceuticals, and information technology products, Tuan added.
At present, industrial parks and economic zones have attracted more than 10,000 domestic projects and nearly 11,000 valid FDI projects with a total registered investment capital of roughly US$340 billion, of which, total FDI capital hit approximately US$230 billion.
Stock market eats away insurance market leaders’ profit
Though some of the largest insurance firms recorded steady growth in revenue in the second quarter of the year, their losses were attributed to their investment in stocks.
The post-tax earnings in Q2 of Petrolimex Insurance Corporation and BIDV Insurance Corporation (BIC) plummeted 30% year-on-year to VND73.8 billion and 50% to VND49.9 billion, respectively, while their profit growth topped in the first quarter of this year.
Sharing the same fate, Military Insurance Corporation’s (MIC) profit after tax plunged 78.5% to VND22 billion. Baoviet Holdings also posted a 28% fall in after-tax profit, standing at VND317 billion.
The companies’ losses were attributed to the tumbling stock market, as stock investments contribute a major part to their financial health, a leader of Baoviet Holdings explained, adding that the firm’s revenue from stock trading and investment plunged 74% year-on-year.
While the initial value of the securities portfolio, including listed and unlisted shares, bonds, and treasury certificates, was VND2.9 trillion by the end of the second quarter, the net realizable value stood at just VND2.7 trillion.
Meanwhile, the firms’ allowance for short-term investment skyrocketed from VND46 billion to VND245 billion.
Bao Long Insurance Corporation reported a loss of VND51 billion in the second quarter due to the falling stock prices. In response to this, it appropriated VND10 billion for provision. Likewise, BIC and MIC’s profits from investment in the period declined by 24% and 32% over the same period last year, respectively. BIC’s after-tax profit in the first half of this year declined to VND125 billion. It also raised its provision for short-term investment to VND14 billion, shooting up over 1,500%. The situation is in line with the forecast of SSI Securities Corporation.
Meanwhile, VNDirect predicted insurance companies will achieve a steady profit growth this year due to an increase in interest rates and a prospect for the market to bounce back in the second half of the year.
Taxation of e-commerce, online businesses to be tightened
The General Department of Taxation has said the taxman from now on would tighten control over the taxation of platforms prone to tax losses, such as e-commerce and digital business models.
The General Department of Taxation has asked the local tax authorities to continue carrying out inspection plans approved by the Ministry of Finance.
Although the current regulations had somewhat helped reduce tax losses, they could still not be prevented completely.
Strengthening tax management and tax collection from online business activities remains difficult, as they can create personal accounts and drive sales through live video streaming.
Meanwhile, diverse types of payments make it harder for the agencies to manage and calculate taxpayers’ money.
If transactions are carried out through banks or an electronic payment system, they can still be managed. However, some e-commerce businesses execute transactions via cryptocurrencies, though the country has not accepted digital money.
Creativity and design festival to return in Nov
The Vietnam Festival of Creativity and Design (VFCD) will take place from November 7 to 20 to create an open and interactive platform for creative individuals and organizations to engage with an extended audience virtually and in person.
The fourth annual program, themed “CHANGE: The Creativity Challenge”, will include cultural exploration tours, talks, seminars, workshops, exhibitions and various online activities discussing the visions, trends, cultural identity and future opportunities for creative industries in Vietnam. Most events will not require entrance fees.
This year’s event is being organized by RMIT University Vietnam in collaboration with UNESCO, VICAS, COLAB Vietnam and other partners in the creative industries.
First aircraft of IPP Air Cargo to arrive in Vietnam
An aircraft of IPP Air Cargo JSC, whose chairman is billionaire Jonathan Hanh Nguyen, will be delivered to Vietnam soon, said a representative of the firm.
The aircraft will arrive after the Civil Aviation Authority of Vietnam grants an air operator certificate to the cargo airline, the representative added. Besides, three other aircraft of the cargo airline are expected to be delivered by the end of the year.
The cargo airline project of IPP Air Cargo costs an estimated VND2.4 trillion in investment, with 30% backed by its own budget and the remainder mobilized from other sources.
The Ministry of Transport had previously reported to the prime minister a plan to issue an air transport license to IPP Air Cargo Company.
Once licensed to offer its freight transport service, IPP Air Cargo will operate five cargo aircraft in the first year of its operations. The fleet will reach seven planes in the second year and 10 in the third.
As of now, 29 international airlines transport commodities from 16 countries and territories to Vietnam.
Saigon Autotech & Accessories Show to be held in late October
The 18th Saigon International Autotech & Accessories Show (Saigon Autotech & Accessories) will be held from October 27-30 in both face-to-face and virtual formats.
It will be held at the Saigon Exhibition and Convention Centre by Asia Trade Fair and Business Promotion JSC (ATFA) with the support of the Vietnam Chamber of Commerce and Industry (VCCI) and the Vietnam Association for Supporting Industries (VASI).
The event will feature about 150 booths and nearly 200 online stalls of domestic and foreign businesses from countries and territories including Japan, the Republic of Korea, Thailand, Malaysia and China. Enterprises are expected to present high-quality products and breakthrough solutions on batteries, energy and spare parts.
According to the organisers, this year’s edition will pay special attention to trade promotion and connection activities between businesses in the face-to-face format or via virtualautotech.com.vn or autotechonline.com.vn.
The event will offer an opportunity for enterprises engaging in the automobile, motorcycle, electric vehicle and supporting industries to find cooperation opportunities while facilitating access for foreign firms thanks to the virtual exhibition, it said.
Committee seeks ways to ensure rapid, sustainable tourism recovery
Deputy Prime Minister Vu Duc Dam on August 17 asked the Ministry of Culture, Sports and Tourism (MCST) to review the operation of household businesses in the tourism sector affected by the COVID-19.
The ministry should coordinate with core travel firms to form key routes connecting localities, the official said at a meeting of the State Steering Committee for Tourism in Hanoi which assessed the implementation of tourism recovery solutions.
He ordered restarting heritage digitalisation with the participation of travel enterprises to promote new tourism products.
Regarding electricity prices for tourism services and lodging facilities, Dam, also head of the Committee, asked the Ministry of Industry and Trade (MoIT) to submit a plan on power price adjustment to the Prime Minister before application.
The MCST, travel associations and firms should propose specific tax and land incentives, he said.
Seven-month crab exports record impressive growth
As of July 15 Vietnam earned US$111 million from crab exports, marking an annual increase of 41%, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
The main markets for the products include China, the United States, Japan, and France, accounting for over 92% of the total export value.
The US, which was the largest buyer of local crabs, purchased more than US$38 million, an increase of 27% from the same period last year.
The US market has fully reopened, fuelling demand for crabs, including from Vietnam. However, the ongoing impact of the Russia-Ukraine conflict has caused food prices to inch up by 40% compared to the beginning of the year, and people have started to reduce their spending, especially on high-value products such as crabs.
VADEP statistics show crab exports to the US continued to grow well in the second quarter of the year, although the growth rate slowed.
Meanwhile, crab exports to China – the second largest market – grew by 76% to reach US$37 million.
Vietnamese crab exports to Japan also continued to grow throughout this period, with the value of crab exports to this market hitting over US$24 million, up 51%.
Banks struggle to recruit personnel for digital transformation
Banks are focusing on digital transformation and automation, which has led to increasing demand for IT and data personnel, according to a report recently released by the recruitment service provider Navigos Group.
Searches by banks for mid- and high-level positions related to digital banking and digital transformation occupied half of bank jobs from the second half of 2021 to mid-2022.
Some positions that are always in high demand for digital transformation include product owner, project manager, business analyst, solution architect, software developer, application development, data analysis, digital marketing, and digital sales.
Candidates in banking’s digital transformation field are limited in terms of quantity and quality. There is a shortage of candidates who have experience utilising advanced technology and many candidates do not satisfy the needs of banks.
It is always difficult to find qualified candidates, not only in banks, but also in other industries such as finance, e-commerce, healthcare, and education.
Since domestic candidates fall short of the standards for adopting cutting-edge technology products and solutions for digital transformation, a substantial amount of cost is spent searching for candidates abroad.
Banks are now able to look for applicants and contact them directly thanks to the development of social networks and information technologies.
Real estate firms burdened with debt repayment
The fact that large numbers of corporate bonds set to fall due this year has put the debt repayment capabilities of businesses, particularly those in the real estate sector, to the test.
A report by KB Securities Vietnam JSC (KBSV) showed that banking and real estate firms accounted for the highest proportion of the corporate bonds issued, at around 60% in 2005-2022.
In 2018-2021, the value of corporate bonds issued reached nearly VND1,600,000 billion, accounting for 64% of the total in 2005-2022.
The surge in corporate bond issues was driven by the State Bank of Vietnam’s tightening of real estate loans.
In 2020, the total value of corporate bond issues was VND458.7 trillion and the figure climbed to VND775,800 billion a year later. The three-year bonds will fall due in 2023 and 2024, according to BIDV Securities JSC (BSC).
BSC noted that the debt repayment pressure would mostly affect unlisted real estate firms and small and medium-sized businesses.
In the short term, the real estate market’s growth prospects are bleak due to bank credit constraints.
In late August or early September, the State Bank of Vietnam may raise the credit growth quotas for the banking sector. The central bank targets 14% credit growth this year but many banks have almost used up their credit growth quotas.
Credit losening proposed to support SMEs
The Government’s Private Economic Development Research Board has proposed the central bank raise credit growth quotas for banks so that they can finance small- and medium-sized enterprises (SMEs) which often find it hard to access bank loans.
As most banks have almost reached their credit growth quotas, credit has been tightened, especially for real estate and manufacturing businesses.
According to the Ministry of Planning and Investment, the first half of 2022 saw a strong surge in the number of newly established and reopened businesses, with over 76,000 new enterprises and over 40,000 companies returning to operation.
The increase signals a recovery in the private economic sector, which should be supported to survive and grow. However, the sector is finding it difficult to access loans as their collateral is low in value, as most of them are startups; their income is unstable; and banks have reached their designated credit growth.
As 95% of the companies in business are household and small- and medium-sized enterprises, if not supported, they could go bust.
Bamboo Airways gets new senior advisor
Duong Cong Minh, chairman at Him Lam Corporation, will serve as senior advisor to the board of directors of local carrier Bamboo Airways.
According to the carrier, Minh is a seasoned entrepreneur with experience in finance and real estate. He is the founder and executive leader of many popular enterprises, such as Him Lam and Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank).
As the carrier’s senior advisor, Minh will play a crucial role in the reform and consolidation of the board at Bamboo Airways and will pave the way for the carrier to sustainably achieve bigger goals in the future, said the carrier’s board chairman, Nguyen Ngoc Trong, as reported by the local media.
Experts forecast real estate market for next year
Real estate businesses and experts gave forecasts about the real estate market in the second half of 2022 and early 2023 and recommendations for investors at the Real Estate Forum held in Hanoi today, with the participation of representatives of the Vietnam Real Estate Association.
According to economic expert Can Van Luc, there are many factors that positively affect the real estate market including the relatively good economic recovery, the acceleration of the program of socio-economic recovery and development 2022-2023, and public investment.
In addition, legal issues have been and are being resolved while interest rates and basic exchange rates were stable despite strong upward pressure. In particular, the credit market is having bright spots. From now until the end of the year, there will still be a new credit wave for good property projects and by 2023 there will be a new credit room.
However, challenges still remain because the economic recovery is not sustainable and the supply is not immediately abundant whereas the prices of energy and raw materials also increased. The Government and responsible agencies have been tightening management of the corporate bond market.
Regarding specific developments in the market, a representative of CBRE Group forecast that from now to 2025, investors will launch new projects on the market. Prices will continue to rise but not too high.
At the forum, experts recommended that real estate businesses actively learn and approach the restoration program and recent resolutions of the Politburo, the National Assembly, and the Government with a focus on digital transformation, the anticipation of new trends and adaptation to new trends, change and risk management.
Banks should tighten assessment controls of their corporate bonds investments: experts
Banks must tighten their assessment controls of corporate bond investments to avoid excessive risk and the misuse of funds raised by firms, experts said.
In early April, the Banking Supervision Agency, under the State Bank of Vietnam (SBV) conducted an inspection of corporate bond investment activities at seven banks, while the Ministry of Finance inspected one bank.
According to the SBV, by the end of 2021, there are 41 credit institutions holding 274 trillion VND (11.7 billion USD) of corporate bonds, of which more than 75% of them are held by ten major banks – Techcombank, MBBank, VPBank, TPBank, BIDV, Vietcombank, VietinBank, HDBank, ABBank and SeABank. At some banks, the value of corporate bonds exceeds 10% of total assets.
Although the inspection results were not published, a SBV senior leader said in an interview with Vietnam Investment Review that a number of credit institutions failed to accurately assess bond issuance plans.
In particular, how companies planned to use the proceeds of corporate bond sales lacked clarity and transparency. Results from the inspection showed there are signs that firms have spent money from bond issuance for the wrong purposes, including cases where funds were used to repay bank loans, buy shares, lend, and transfer the money back to the issuers.
According to a VNDIRECT Securities Company analyst, credit institutions must increase their capacity for rating and appraising debt, particularly corporate bond investments, in order to reduce risks.
Accordingly, the expert suggested that credit institutions need to step up inspection and supervision of the issuers’ use of capital to ensure that the capital is used for the right purposes, and strengthen risk management for corporate bond investments.
A delegation of 13 leading Danish agri-food firms in Solutions for Livestock & Food Production, Food Processing Technologies, Ingredients and Climate Control Solutions is giving expertise to Vietnamese partners