08/11/2023 12:30 (GMT+07:00)
The recent visit by Prime Minister Pham Minh Chinh to Saudi Arabia to attend the ASEAN-Gulf Cooperation Council (ASEAN-GCC) Summit has opened up numerous international cooperation opportunities for Vietnam’s oil and gas industry, helping it to develop in the future.
Insiders said the unexpected fluctuations in crude oil prices and the strong energy transition trend are posing many challenges for Vietnam’s petroleum industry.
Vietnam still heavily relies on the global supply of petroleum products. To reduce this dependence, the government has been implementing various policies to realise the goal of renewable energy development in the future.
Expanding cooperation with countries that have strength in energy, diversifying supply sources, and shifting towards green energy consumption will be effective solutions to ensure price stability domestically in the context of unpredictable geopolitical risks and global financial fluctuations.
International cooperation is expected to provide an opportunity for the oil and gas industry to become self-reliant on supply.
The fluctuations in the global crude oil market have had an impact on Vietnam. Notably, the country’s crude oil and petrol imports reached 7.81 million tonnes and 8.03 million tonnes, representing growth rates of 8.3% and 23.1%, respectively.
In contrast, the cumulative crude oil exports in the first 9 months of 2023 reached 2.03 million tonnes, a decrease of 14.9% compared to the same period last year. The cumulative export of gasoline also fell by 9.1%, reaching 1.66 million tonnes.
According to the World Bank, Vietnam’s economic growth is expected to expand by 5.4% and 6% in 2024 and 2025, respectively. Therefore, the demand for crude oil in particular and energy in general is on par with the country’s economic growth.
To ensure energy security and meet the consumption demand, the Government is promoting sustainable economic development and the green energy industry, and intensifying cooperation with foreign partners.
In the framework of his trip to Saudi Arabia in October, PM Pham Minh Chinh held talks with Saudi Arabia’s Crown Prince and Prime Minister Mohammed bin Salman, during which the Vietnamese leader called on Saudi Aramco, one of the largest companies in terms of market capitalisation in the world, to consider investing in Vietnam’s oil and gas industry.
The trip reaffirmed the potential for bilateral cooperation between Saudi Arabia and Vietnam in various fields, particularly in the oil and gas sector.
Representatives of Saudi Aramco also expressed their desire to invest in developing an oil refinery in Vietnam.
If Aramco’s plan is implemented, it will bring several high-value and high-tech investment projects to the Southeast Asian nation.
Furthermore, the firm is also focusing on investing in new low-carbon emission technologies to help mitigate pollutant emissions. This aligns with the long-term goal of the Vietnamese government in developing renewable energy projects.
This partnership is expected to open up prospects for improving and upgrading infrastructure and technology for businesses operating in oil and gas exploitation and production. It will also ensure domestic supply, energy security, and sustainable economic development in the context that the global market still carries many risks.
Early warning system for trade remedies helps maintain exports’ competitiveness
Thanks to free trade agreements with tariff barriers gradually being removed, the exports of Vietnamese products have been on the rise. However, they are likely to face trade defence lawsuits.
An early warning system for trade remedies is needed to help ensure sustainable trade development by helping businesses better respond to possible trade probes, heard a seminar on the issue held by Industry and Trade Magazine on November 6.
Speaking at the event, Commercial Counsellor and head of the Vietnam Trade Office in the US Do Ngoc Hung said that Vietnam is an important trade partner of the US but also faces risks relating to trade remedies.
The number of trade defence probes that the US has applied to Vietnam accounts for about 53% of the total number of trade defence cases against Vietnam’s exported goods. Meanwhile, US businesses are very aware of their rights and tools when importing goods with high competitiveness that can harm the domestic manufacturing industry. They also know how to use trade remedies to protect their interests if being sued in their home market.
Moreover, not only the US Department of Commerce but other agencies such as the International Trade Commission, US customs or border guards can investigate trade defence cases.
As of October 2023, Vietnamese products were involved in up to 58 trade defence cases in the US. The types of affected products are expanded and even not Vietnam’s key export products.
Hung said that through market monitoring, it can be seen that Vietnamese exporters have paid more attention to trade defence cases as well as the early warning system. They have fully participated and closely followed warnings from the Trade Remedies Authority of Vietnam under the Ministry of Industry and Trade (MoIT).
Hung said the early warning system is very important because it creates conditions for businesses to learn about the US’s legal regulations on trade remedies early. In addition, thanks to the warning, businesses can start to prepare necessary resources to respond to possible lawsuits.
Once being sued, Vietnamese businesses will have to invest a lot of efforts and human, time and financial resources to participate throughout the investigation process of the case which usually costs about 12 months.
With proactive response, they can provide the US’s investigation agencies with proper documents in the correct format and on time, he said.
Director of the WTO Centre and Integration under the Vietnam Chamber of Commerce and Industry (VCCI) Nguyen Thu Trang said that not only in the US but in all countries, trade defence lawsuits are a very complicated legal and technical process. Notably, most of the process must be done abroad, which adds difficulties for businesses.
The early warning mechanism allows businesses to see risks and prepare for them, Trang said.
Chu Thang Trung, Deputy Director of the Trade Remedies Authority of Vietnam said that the ministry has been working to increase businesses’ understanding about trade remedies.
With data from the early warning system, the ministry can concentrate on products and industries that face a high risk of trade defence probes.
He informed that the MoIT plans to continue to expand the warning system for other markets like Southeast Asia, and Turkey besides the US, Canada and Australia.
Clock ticking for southern localities to fulfil FDI attraction targets
While some southern localities have fulfilled their targets for FDI attraction, the clock is ticking for many others to complete their goals since there are only 1.5 months left to the end of 2023.
With low supply of industrial land, Ho Chi Minh City did not set ambitious targets in luring foreign capital.
According to the Ho Chi Minh City Export Processing and Industrial Zones Authority (HEPZA), foreign investors funneled nearly 950 million USD into the southern hub’s industrial parks during January – October, or 172% of the yearly plan. Of the total, some 184 million USD was poured into the city in October, a year-on-year rise of 28%.
Dong Nai, another FDI magnet, realised its attraction target right in September after drawing 120 foreign-invested projects worth nearly 940 million USD in the first nine months, surpassing the yearly plan by around 34%. The province has become more attractive to foreign enterprises thanks to its favourable geographical location, sound administrative reform and infrastructure upgrade.
In the meantime, others in the southern key economic region are racing against time to secure more foreign investment.
Some 1.3 billion USD in foreign capital was registered in Binh Duong, another industrial hub in the south, so far this year, or 70% of the set plan. However, the target of 1.8 billion USD for the whole year is within reach of the province as many large corporations have announced their plans to increase investment in the locality.
In recent years, FDI attraction in Binh Duong has exceeded its set goals. According to statistics from the provincial People’s Committee, the province got 9.56 billion USD in foreign investment during 2020-2023, higher than its target of around 9 billion USD. By 2025, FDI attraction in the province is expected to reach 13.2 billion USD.
Meanwhile, Director of Department of Planning and Investment of Ba Ria – Vung Tau province said the province is likely to fulfill 78% of its goal this year due to global economic headwinds, sluggish progress on land auction and incomplete transport infrastructure.
Since many US and European firms have come to look into investment climate as well as propose investment in the southern localities in recent time, FDI attraction in the region is said to scale up in the coming time.
Foreign investors net sellers in October
Foreign investors were net sellers on the Ho Chi Minh Stock Exchange (HoSE) in October to the tune of 1.59 trillion VND (64.4 million USD), according to the major bourse.
The VN-Index, which represents the HoSE, closed the last trading session of October 2023 at 1,028.19 points, marking a 10.91% decline compared to September but a 2.10% increase compared to the end of 2022.
The VN30 index, tracking the performance of 30 largest caps, stood at 1,039.38 points, recording a 10.88% decrease compared to September and a 3.40% increase compared to the end of 2022.
The HoSE reported that most industry indexes experienced decreases in October, with the consumer goods industry (VNCOND) witnessing the largest decline of 20.22%. The energy industry (VNENE) and the essential consumer goods industry (VNCONS) also dropped by 14.94% and 14.30%, respectively.
Market liquidity also plunged during October, with the average trading volume reaching over 625.89 million shares, equivalent to an average trading value of 14.3 trillion VND. This represented a 35.32% decrease in volume and a 38.68% fall in value compared to September 2023.
As of October 31, 2023, the HoSE listed and traded a total of 609 stock codes, including 394 stock codes, three closed-end fund certificate codes, 14 ETF fund certificate codes, and 198 warrant codes with guarantees. The total volume of listed shares reached over 147.87 billion shares, with a capitalisation value of more than 4.14 quadrillion VND. This represented a 10.38% decrease compared to the previous month and accounts for more than 93.7% of the total listed market capitalisation value, equivalent to 43.53% of GDP in 2022.
By the end of October, the southern bourse had 35 enterprises with capitalisation exceeding 1 billion USD, with the Joint Stock Commercial Bank for Foreign Trade of Vietnam remaining the only enterprise with capitalisation close to 20 billion USD.
Vietjet opens direct route to Shanghai with tickets from only 0 VND
To celebrate the festive season, Vietjet will open a new route connecting Ho Chi Minh City of Vietnam to bustling and vibrant Shanghai city of China.
From December 1, 2023, there is one return-flight per day and 0 VND (excluding taxes and fees) tickets every week to fly to Shanghai easily on the website www.vietjetair.com and the Vietjet Air mobile app.
With a flight time of just over 4 hours, flights from Tan Son Nhat International Airport in Ho Chi Minh City take off at 16:25 (local time) and land at Pudong International Airport in Shanghai at 21:30 (local time). Flights from Shanghai take off at 23:00 (local time) and land at 02:45 (local time) in Ho Chi Minh City.
Central bank to accelerate disbursement of social housing loan package: Governor
The State Bank of Vietnam (SBV) will step up the information work to further popularise the social housing loan package among the public given its sluggish disbursement, SBV Governor Nguyen Thi Hong said at a question and answer session of the 15th National Assembly in Hanoi on November 6.
The 120 trillion VND (5.12 billion USD) credit package with incentive interest for both developers and buyers is set to boost social housing construction amid a shortage of affordable apartments.
Under the 10-year package, which was launched by the central bank in April, the loan interest rates for them will be 1.5-2% lower than those of commercial banks.
However, the disbursement has been far slower than expected due to the limited supply and inappropriate loans terms, Hong explained, noting that the central bank will urge People’s Committees of cities and provinces to soon announce projects entitled to the package.
The bank will instruct credit institutions to pay more attention to the disbursement, and expand it to commercial banks, Hong said.
Over the past time, only 18 out of the 63 People’s Committees released the list of participating projects with 53 projects and total loan demand of 27 trillion VND. To date, 105 billion VND has been disbursed for three in three localities.
According to a Government report, as of the end of September, a total of 46 social housing projects with about 20,210 apartments had been completed in urban areas, while 419 others with 392.635 apartments are under construction.
Regarding cashless payment, Hong stressed that thanks to specific solutions taken by the SBV such as reviewing the legal system, non-cash transactions have been on the rise.
However, the traditional payment habit and the prevalence of high-tech crimes are among the obstacles to cashless payment, she said, adding that the SBV will further review relevant documents, coordinate with agencies to perfect the legal corridor, take solutions to ensure information security and safety for clients, and enhance the communications work.
At the working session, the Governor also cleared up questions on credit management and loan shark prevention.
Nghi Son Refinery to supply 1.57 mln tonnes of petroleum in last two months of 2023
According to the Nghi Son Refinery and Petrochemicals LLC (NSPR) in the central province of Thanh Hoa, the group will strive to supply to the market a total of 1.57 million tonnes of petroleum products in the last two months of 2023.
After completing major maintenance ahead of schedule, the NSPR resumed its operation and sales of refined fuels on October 12. Currently, it is maintaining production activity at its designed capacity, ensuring stable supply for domestic market.
To assure a smooth operation, the NSPR has worked with suppliers about plans to import crude oil for the last quarter of 2023. The plan to import crude oil for next year’ first quarter will be discussed in mid-November.
The company said that when prices of crude oil in the world increase, it will result in hike in prices of other products and services. Therefore, it will continue to optimise all resources to ensure efficiency in production and business activities as well as to avoid negative impacts from fluctuations in crude oil and product prices.
The NSRP is a joint venture company established in April 2008, with Vietnam Oil and Gas Group (PVN), Kuwait Petroleum Europe. B.V. (KPE), Idemitsu Kosan Co.,Ltd. (IKC) and Mitsui Chemicals Inc. (MCI) as its sponsors.
The construction of the NSRP – the second refinery in Vietnam – began in October 2013 and finished in April 2017. Kuwait is the supplier of all crude oil for the project, whose products include liquefied petroleum gas, gasoline A92 and A95, diesel, kerosene, jet fuel, paraxylene, benzene, polypropylene, and sulphur.
With a total investment capital of over 9 billion USD and a processing capacity of 200,000 barrels of crude oil per day (equivalent to 10 million tonnes per year), the refinery is one of Vietnam’s key national projects and one of the most sophisticated refineries operating in Asia today.
US’s Montgomery county looks to partner with Dong Nai
A delegation from the Montgomery County in Maryland State of the US and the Vietnam – US Business Council paid a working visit to Dong Nai to explore investment and cooperation opportunities in the southern locality.
During a working session with local officials on November 6, Marc Elrich, Montgomery County Executive said the US region and businesses want to set up bilateral relations with Dong Nai.
According to Elrich, Montgomery county has many potential and strengths in industrial development, especially in biotechnology and information technology, and US businesses wish to cooperate in production and business with their Vietnamese peers.
Montgomery has many programmes and policies to support Vietnamese businesses in investing and opening companies in the United States, he added.
Elrich expressed his impression with the transportation and urban system in Dong Nai, saying that this is an inspiration for Montgomery as well as US businesses to build long-term cooperation with Dong Nai.
Secretary of the provincial Party Committee Nguyen Hong Linh briefed the guests on Dong Nai’s long-lasting industry, saying that the locality is home to 32 industrial parks spanning 10,300 ha, attracting 1,600 projects worth nearly 35 billion USD from 45 countries and territories around the world.
According to Linh, US firms are operating 30 projects in the locality with a total capital of nearly 270 million USD. Dong Nai signed Memoranda of Understanding (MoUs) and a provincial-level international cooperation agreement with the US states of Arkansas, Virginia, and Oklahoma, and established the Vietnam – US Friendship Association of Dong Nai province.
He said that many large transport infrastructure projects are implementing in Dong Nai, especially Long Thanh International Airport and highways, noting that once completed and becoming operational, these projects will strongly promote local economic development, opening up many opportunities for foreign businesses.
Linh hoped that through this meeting, Montgomery county and the US business community will have more information about Dong Nai, thus promoting cooperation opportunities in investment and human resources training between the two sides.
According to representatives of the Vietnam – US Business Council, the US delegation’s trip aims to connect US – Vietnam business ties, especially in areas where Montgomery has strengths such as science and technology, information technology, and semiconductor chip production.
The Vietnam – US Business Council will support Dong Nai as well as Vietnam in education and human resources training; and guide Vietnamese businesses how to complete procedures for exporting goods to the US, and issues related to immigration.
Director of the provincial Department of Planning and Investment Nguyen Huu Nguyen said Dong Nai is calling for investment in hi-tech projects, semiconductor chip production, supporting industries, new material production, and clean agriculture with many preferential and supportive policies.
The provincial authorities always create favourable conditions and support US businesses in exploring investment opportunities as well as production and business activities, Nguyen affirmed.
Saudi Fund for Development contributes to Vietnam’s development
The Embassy of Saudi Arabia in Vietnam on November 6 held an event highlighting contributions of the Saudi Fund for Development (SFD) in Vietnam and the world.
Speaking at the event, Saudi Arabian Ambassador to Vietnam Mohammed Ismaeil A. Dahlwy said, founded in 1974, the SFD is a financial institution of the Saudi Arabian government that has played a significant role in providing funding for development projects in developing countries. It has so far funded over 800 projects and development programmes across various fields in 100 countries.
In Vietnam, the SFD has provided concessional loans for 12 projects, ranging from the construction and expansion of educational and healthcare facilities to the development of transportation infrastructure and upgrade of rural infrastructure affected by natural disasters, contributing to close ties between Saudi Arabia and Vietnam over the past 24 years.
On the occasion, CEO of the SFD Sultan Al-Marshad announced that the Ha Nam Vocational College project, funded by the SFD with a budget of over 9 million USD, was inaugurated in the afternoon of the same day.
As next year marks the 25th founding anniversary of bilateral diplomatic ties, Vietnamese Deputy Minister of Planning and Investment Tran Quoc Phuong expressed his belief that the SFD will continue playing as a bridge to foster Vietnam – Saudi Arabia ties, aiming for new cooperation opportunities that align with the priorities of both sides.
Corporate bonds worth over 8.61 billion USD issued in 10 months
Over 209.15 trillion VND (over 8.61 billion USD) was raised from the issuance of corporate bonds in the first 10 months of 2023, according to data compiled by the Vietnam Bond Market Association (VBMA) from the Hanoi Stock Exchange (HNX) and the State Securities Commission (SSC).
There were 25 initial public offerings with a total value of nearly 23.77 trillion VND in the period, accounting for 11.4% of the total value, and 171 private placements worth 185.38 trillion VND, or 88.6%.
The banking sector was the largest issuer, with a total issuance value of 99.02 trillion VND, equivalent to 47.3%, followed by the real estate sector with 68.25 trillion VND, or nearly 32.6%.
In October alone, the total value of issued corporate bonds reached 20.82 trillion VND (over 857.5 million USD), up 50% compared to the previous month.
The VBMA reported that companies bought back corporate bonds totaling 13.64 trillion VND in October, down 17.4% year-on-year.
For the remaining months of this year, the total value of bonds reaching maturity will be 41 trillion VND.
Ba Ria-Vung Tau’s FDI attraction rises by 2.78 times
The southern province of Ba Ria-Vung Tau has attracted 20 foreign-invested projects worth 751 million USD since the beginning of this year, five projects higher and a 2.78-fold increase in capital compared to the same period last year.
In the period, there were 25 existing projects with capital adjustments, with a total additional investment of 503 million USD, up 15.3%, according to the provincial Department of Planning and Investment.
In October alone, Ba Ria-Vung Tau saw five newly-registered projects totalling 594 million USD, and 62.5 million USD was added to six existing ones.
To date, the southern province has lured 457 FDI projects with a combined registered capital of 31.4 billion USD, including 284 in its industrial parks.
Chairman of the provincial People’s Committee Nguyen Van Tho asked departments, sectors and localities to exert efforts to attract more domestic and foreign investors, and help them deal with difficulties.
Proposal of Cao Xá Railway Station for international freight transport
The Commission for Management of State Capital at Enterprises (CMSC) has just sent an official letter to the Ministry of Transport (MoT) on investment in upgrading railway infrastructure at Cao Xá Railway Station in Hải Dương Province.
Specifically, the document recommends that MoT should add the project of upgrading and renovating Cao Xá Railway Station to the medium-term public investment plan for the 2021-25 period.
The ministry was also requested to grant a licence for international freight transport at Cao Xá Station from the first quarter of 2024.
Previously, Việt Nam Railway Corporation proposed to MoT and CMSC to invest in upgrading and renovating railway infrastructure to serve train operations at Cao Xá Station on the Hà Nội-Hải Phòng route, meeting inter-regional and international freight transport demands in two phases.
Total investment in phase 1 is expected to be VNĐ61 billion (US$2.5 million), excluding site clearance costs, from medium-term public investment capital for the 2021-25 period or from the ministry’s capital source which is contributed by enterprises under the MoT’s management.
The total investment in phase 2 of the project will be VNĐ234 billion ($9.6 million) from the capital of the Việt Nam Railways Corporation and other legal sources.
Currently, Cao Xá is a class 4 station, located at Km50+870 on the Hà Nội-Hải Phòng rail route, close to major industrial parks of Hải Dương Province such as Đại An, Cẩm Điền, Phúc Điền, Tân Trường, and Ken Mark.
If international freight transport is well organised, goods in Hải Dương Province can be exported to China, Europe, and Central Asia by rail instead of having to transport goods to seaports, and complete import and export procedures in the province.
On the other hand, the shipping time from Việt Nam to the Russian and European markets is shortened by 30 per cent compared to sea transport.
The Việt Nam Railway Corporation said that currently, goods in Hải Dương Province are not directly exported or imported by rail because the stations in the area do not have cargo yards qualified to operate containers.
Therefore, Cao Xá Station needs to be built and renovated according to separate functional zones such as a container yard of over 10,000sq.m surrounded by walls, and areas for import and export goods, and customs supervision.
Hà Nội realises $1.58 billion of investment capital in 10 months, key projects disbursed
Investment capital from the State Budget implemented in October by Hà Nội is estimated to reach VNĐ5.191 trillion (US$211 million), up 1.9 per cent over the previous month and up 18.5 per cent over the same period last year.
Among the capital funded by the State Budget, the city-level investment was VNĐ1.753 trillion ($71.4 million), increasing by 0.8 per cent and 8.3 per cent compared to the previous month and the same period last year, respectively, while the district-level investment was VNĐ3.724 trillion ($151.3 million), up by 2.5 and 24.9 per cent, and the commune-level one was VNĐ164 billion ($6.6 million), rising by 1.9 and 16.7 per cent.
Overall, in the first 10 months this year, realised investment capital from the State budget managed by localities reached VNĐ38.8 trillion ($1.58 billion), up 6.3 per cent over the same period last year and reaching 66.6 per cent of the yearly plan of 2023, of which, the city-level capital implemented reached VNĐ15.2 trillion ($619 million), increasing by 1.5 per cent and covering 60.5 per cent of the yearly plan, district-level capital implementation was VNĐ22.2 trillion ($904 million), increasing by 10.2 per cent and reaching 70.9 per cent, and commune-level capital was VNĐ1.4 trillion ($56.8 million), increasing by 2.9 per cent and reaching 76.5 per cent.
In particular, the Ring Road 4 of the Capital Region Project is the largest and most important road with a length of 112.8km (including 103.1km of Ring Road 4 and 9.7km of the route connecting Nội Bài-Hạ Long Expressway) with the starting point on the Nội Bài-Lào Cai Highway in Thanh Xuân Commune of Sóc Sơn District, and the ending point on the Nội Bài-Hạ Long Highway in Quế Võ District of Bắc Ninh Province.
The project is divided into seven component projects with a total expected investment for phase 1 of about VNĐ85.8 trillion ($3.54 billion).
The Capital Region’s Ring Road 4 started construction in three localities of Hà Nội, Hưng Yên, and Bắc Ninh province in June.
To date, the project has handed over 82 per cent of the sites, of which construction can be started on 68.5 per cent. Hà Nội handed over 81 per cent of its planned area, Hưng Yên Province – 83.4 per cent and Bắc Ninh – 83.4 per cent.
Currently, the project has been simultaneously constructed at 29 locations, expected to be basically completed in 2026 and put into operation in 2027.
Ring Road 1 project’s Hoàng Cầu-Voi Phục section, phase 1, which has a length of over 2.2km and is 50m wide with the starting point in Đống Đa District and the ending point in Ba Đình District, has an investment of VNĐ7.2 trillion ($293 million) from the city’s budget, of which construction costs are VNĐ627 billion ($25.4 million) and site clearance costs are VNĐ5.8 trillion ($263.7 million).
To date, the project has disbursed 21.8 per cent of the capital plan.
The project of renovating and upgrading National Highway 6 is to upgrade 21.7km and widen to 4-6 lanes with a design speed of 80km per hour for the Ba La-Xuân Mai section in Hà Đông District and Xuân Mai Township in suburban Chương Mỹ District.
The project contributes to completing the radial road connecting National Highway 21A, Hồ Chí Minh Expressway and Ring Road 4 of the capital region.
The project’s total investment capital is VNĐ8.1 trillion ($330 million) from the city budget, of which over VNĐ5.1 trillion ($207.8 million) is for site clearance and VNĐ2.9 trillion ($118 million) is for construction and equipment procurement costs.
Currently, the project has disbursed 4.7 per cent of the capital plan. Construction time for the entire project is five years from 2022 to 2027.
For the Thăng Long Highway project, the section from National Highway 21 to the Hà Nội-Hoà Bình Expressway, with a length of 6.7km, has a total investment of VNĐ5.249 billion ($213.3 million) and disbursement reaching 3.2 per cent of the capital plan.
Packaging key to brand impression
First impressions matter, but many small- and medium-sized enterprises (SMEs) in Việt Nam have failed to pay adequate attention to packaging, a mistake that has compromised their brands and bottom lines.
According to Nguyễn Thị Thu Nga, a Vietnam National University of Agriculture lecturer, packaging is a bridge between a brand and its customers.
In the UK, milk producers are so mindful of packaging that they use two package colours to designate sugar-containing and sugar-free products. The visual elements allow customers to tell them apart without reading product labels.
But visual effects are not the only game-changer in the world of marketing. A product that is easy and convenient to open can also create a positive customer experience that encourages repeat purchases.
Unfortunately, many producers in Việt Nam are unaware of the tricks. They keep packaging their products in such a way that requires much ado to slit the wraps. The inflexibility often causes frustration for customers and discourages them from buying the products again.
Trịnh Thị Thu Giang, a Hanoi Architectural University lecturer, shared Nga’s views. She urged Vietnamese producers to shift towards creative customised packaging to break away from the traditional mindset of inflexibility.
She took a champagne producer in the UK as an example to metaphorically demonstrate the importance of creativity in packaging. While its rivals produced ordinary wine glasses only to find their prices depressed by retailers, the producer crafted its own wine glasses with bases that allow them to be inverted.
And customers were willing to pay a premium for the unique design. The glasses were so popular that they were sold for double the price of ordinary glasses and its brand quickly gained favour among oenophiles. The moral of the story: creativity is the key to brand impression.
The lecturer said effective packaging design required an understanding of both the practical and scientific aspects of the field. Collaboration with research institutions and universities could provide businesses with access to cutting-edge research, the latest industry trends, and expert insights. This knowledge was crucial in making decisions regarding packaging materials, sustainability, and design aesthetics.
Nguyễn Trung Thành, deputy director of the Vietnam Craft Center, underlined the importance of well-designed packaging that discloses full information about the products, including their origins, in building brand awareness.
He said dried beef with an indication of Central Highlands origin or black jelly of Cao Bằng origin could instil a sense of confidence in consumers because these regions are well-known for their high-quality ingredients. Meanwhile, dried beef without such indication might raise doubts about its quality among gourmets.
He recommended that Vietnamese producers perform a comprehensive cost analysis before embarking on a packaging redesign. This involves evaluating the financial implications across the entire production chain, from the procurement of materials to the final product placement. The goal is to strike a balance between enhancing packaging and maintaining an attractive price point that appeals to the target market.
Bright prospects for shrimp exports to the UK
Vietnamese shrimp exports to the UK could see an average growth of over 10 per cent per year annually from now until 2025, thanks to preferential duties provided by the United Kingdom-Việt Nam Free Trade Agreement (UKVFTA).
This forecast was delivered by the Ministry of Industry and Trade’s Import-Export Department in the publication titled “Developing the UK market for the seafood industry.”
Since the UKVFTA came into force, tariff duties on frozen shrimp products exported to the UK have been reduced to zero per cent. That has offered Vietnamese exporters a competitive advantage compared to other rivals such as Thailand, Malaysia, Indonesia, Philippines, India, and Brazil, which have yet to sign an FTA with the UK.
But to enjoy these preferential duties, Vietnamese shrimp products must meet the rules of origin, stipulating that raw materials for production must be cultivated and harvested within Việt Nam’s territory.
The department said that Vietnamese shrimp exporters have gradually adapted to the commitments of the UKVFTA and recorded positive export growth.
Over the past two months of 2023, exports of white leg shrimp hit US$30.4 million, accounting for 69 per cent of Việt Nam’s seafood export turnover to the UK, statistics from the General Department of Customs revealed.
During the two months, black tiger shrimp shipments, though accounting for only 2.7 per cent of the total, increased six times compared to the same period last year. That has shown a very optimistic signal for this product in the UK market.
The department said the UK’s seafood consumption demand, including shrimp, remained large. However, in the coming time, the market’s demand might be negatively influenced by global commodity trade developments. Rising inflation would also make commodity prices a concern for consumers.
At the same time, its seafood import activities would face difficulties in costs and transportation of goods, the department said.
Despite these challenges, the UK remained a lucrative market for Vietnamese shrimp products in the long period. Việt Nam’s shrimp shipments to the market would likely account for 3.6 per cent of the country’s total shrimp exports (about $4 billion) in the future.
US launches anti-dumping investigation of aluminum products from Việt Nam
The US Department of Commerce (DOC) has launched an anti-dumping investigation on aluminum extrusions and products made from aluminum from 15 countries, including Việt Nam.
The investigation was initiated based on a petition filed by various labour unions in the US, including the Aluminum, Steel, Paper, and Forestry Unions.
The alleged dumping margin for Việt Nam is 41.84 per cent, which is lower compared to the margins for the top three exporting countries to the US.
Việt Nam accounted for approximately 7.6 per cent of total exports to the US in 2022, making it the fourth highest exporting country.
The petitioners have identified around 14 Vietnamese companies believed to have dumped aluminum products into the US market.
In an anti-dumping investigation, the DOC investigates the act of dumping, while the International Trade Commission evaluates the impact on the domestic manufacturing industry.
Anti-dumping duties will only be imposed if both agencies conclude that dumping has occurred and has caused damage to the domestic industry.
Currently, the US still considers Việt Nam a non-market economy.
Vietnamese Prime Minister Phạm Minh Chính has urged the US to recognise Việt Nam as a market economy, but until then, the DOC will use surrogate values from a third country, likely Indonesia, to calculate the dumping margin.
The investigation is expected to last 12 to 18 months, and companies involved are advised to stay informed and cooperate fully with the DOC throughout the process.
The Việt Nam Trade Remedies Authority advises companies to update information and submit documents through the DOC’s online portal https://access.trade.gov/login.aspx.
UOB: 76% of Vietnamese consumers optimistic about their finances for next year
A report of United Overseas Bank (UOB Việt Nam) shows that 76 per cent of Vietnamese people are optimistic about improving their personal finances by the middle of next year, followed by Indonesians (74 per cent) and Thais (68 per cent).
The study has found that Vietnamese consumers are more optimistic compared to those in Singapore, Malaysia, Thailand, and Indonesia, but remain concerned about rising inflation.
Rising inflation is the top concern in the ASEAN region, with 62 per cent of respondents agreeing that this is their top worry.
Eight out of 10 consumers in Việt Nam are worried about their finances. The top three financial concerns in Việt Nam are the ability to save money (32 per cent), the ability to maintain current lifestyle (32 per cent) and the ability to meet the financial and healthcare needs of parents (30 per cent).
Therefore, Vietnamese consumers are more cautious with their finances and investments. Sixty five per cent of respondents reported tracking their spending more closely through online banking platforms and 60 per cent learned more about products with incentives, reward points or savings.
Financial preferences are also changing with consumers allocating more money to low-risk financial instruments such as bank fixed deposits (32 per cent) and insurance plans (28 per cent). Twenty five per cent of respondents in Việt Nam are allocating more money to insurance products compared to last year, which is four percentage points higher than the regional average, especially among affluent consumers (36 per cent).
According to the survey results, many consumers in Việt Nam are interested in learning more about sustainable investment. 40 per cent said they already included sustainable investments in their portfolios and 58 per cent would consider making sustainable investments if it suited their risk appetite. Nine out of ten consumers say sustainable investing helps achieve the dual goal of achieving financial returns while also benefiting the environment.
The preference to adopt digital banking and payment channels continues to trend strongly. Consumers are favouring mobile banking apps, and newer digital payment modes like e-wallets, QR code-based payments, e-commerce payment platforms, and mobile wallet debit or credit cards.
As Vietnamese consumers become more digitally proficient, usage of mobile banking applications has increased dramatically with 54 per cent of respondents increasing their use of this channel over the year. More than half of those surveyed prefer to use online channels to transfer money abroad and check reward points status.
For more complex or high-value transactions, consumers still value in-person channels or a combination of online and in-person channels.
In the field of payments, Vietnamese consumers showed that they are knowledgeable about the latest technologies. E-wallets, card payments on mobile wallet apps and e-commerce payment platforms are the most popular payment methods used by 67 per cent, 58 per cent and 55 per cent of people surveyed, respectively.
The survey showed that four out of five consumers in Việt Nam use e-wallets at least once a week and tend to recommend them to others. Momo is the most popular e-wallet among consumers, followed by ZaloPay and VNPay.
Paul Kim, head of Personal Financial Service at UOB Vietnam, said: “Strong economic growth in Việt Nam has given the nation’s consumers more optimism about their financial wellbeing when compared to their regional counterparts. While they are concerned about high inflation, we are encouraged by their continued enthusiasm to embrace a new era of digitalisation.”
“As a financial institution, the study’s findings and insights regarding consumer priorities, savings habits, financial behaviours, and digital preferences are invaluable. This allows us to understand our customers better and tailor our services to their needs as we enhance our engagement efforts,” Kim said.
Textile stocks face uncertain future as recovery hinges on export market and inventory management
The potential price increase of textile stocks in the latter part of 2023 is heavily reliant on the recovery pace of the export market and the ability of brands to manage inventory levels. However, the third-quarter results of textile and garment enterprises displayed a decline.
After a period of optimistic growth, the textile and garment export sector experienced a prolonged slowdown starting from late 2022 to early 2023. This was a consequence of various factors, including the Russia-Ukraine conflict, geopolitical tensions, inflation and reduced consumption.
In August, textile export turnover reached US$4.06 billion, surpassing the 2022 average of $3.72 billion. Orders gradually began to return in the final months of the year, indicating positive signs.
“For the first time, we received production orders from customer brands in Thailand and the Philippines. Although the number of orders cannot be compared to the size of the US and European markets, it demonstrates the company’s efforts in diversifying global markets,” said Thân Đức Việt, general director of Garment 10 Corporation SJC (M10).
Domestic economic factors also support the textile exports. Decreasing lending interest rates provide businesses with opportunities to utilise cheaper credit sources compared to the beginning of the year, meeting capital requirements and increasing production investment.
Analysts suggest that Việt Nam’s exports have reached their lowest point, and there are indications of recovery in the fourth quarter, aided by the depletion of US retailers’ inventories. The recovery is also attributed to the growing trend of multinational companies shifting their production from China to Việt Nam.
“Businesses are expected to achieve positive profit growth as early as the fourth quarter of 2023,” forecasts SSI Research.
Not only does the textile and garment sector play a crucial role in export activities, but it also comprises a significant number of listed companies on the stock exchange.
From late August to mid-October, while the market faced mounting pressure, cash flow continued to gravitate to textile and garment stocks.
For instance, on September 21, TNG shares of TNG Investment and Trading JSC reached VNĐ22,300 per share, the highest level in 12 months. Subsequently, the stock experienced a downward adjustment, closing at VNĐ18,400 per share on November 3, a nearly 17.5 per cent decline from the recent peak.
HTG stocks of Hòa Thọ Textile – Garment JSC witnessed a price increase from April until October 16, reaching VNĐ33,000 per share before undergoing a downward adjustment. At this price, HTG shares had increased by approximately 50 per cent since the beginning of the year.
Similarly, MSH of Sông Hồng Garment JSC reached VNĐ45,600 per share on October 13, sustaining the increase until mid-October. Compared to the start of the year, the market price of MSH had risen by roughly 45 per cent.
Regarding valuation, Việt Dragon Securities Co (VDSC) stated that shares of textile and garment companies are currently trading at a trailing P/E level significantly higher than the historical average. Hence, expectations of recovery prospects have already been partially incorporated into stock prices.
VDSC emphasised that the potential price increase of textile stocks in the second half of 2023 depends largely on the export market’s recovery speed and brands’ ability to manage inventory levels.
However, the third-quarter results of textile and garment enterprises demonstrated a decline, contrary to market expectations. In the first nine months of 2023, most textile and garment companies reported negative profit growth or even substantial losses compared to the same period in the previous year.
Most recently, Việt Nam Textile and Garment Group (VGT) reported a cumulative net revenue of VNĐ12.18 trillion and pre-tax profit of VNĐ288 billion for the first nine months of the year, representing a decline of 14 per cent and 76 per cent, respectively.
Similarly, Thành Công Textile and Garment Investment Trading Joint Stock Company (TCM) reported a 50 per cent decrease in profit during the first nine months of 2023 compared to the same period in 2022, amounting to VNĐ111 billion.
Century Fiber Joint Stock Company (STK), another textile enterprise, recorded a net revenue of VNĐ1.07 trillion and an after-tax profit of nearly VNĐ56 billion for the nine-month period, experiencing a downturn of 36 per cent and 72 per cent, respectively, compared to the same period in 2022.
Việt Nam, Japan vow to promote innovations for further development
Six best solutions of the programme “Inno Vietnam – Japan Fast Track Pitch 2023” (Vietnam – Japan Innovation: The Road to Success) were announced at a ceremony in Hà Nội on Friday.
The programme, initiated by the National Innovation Centre (NIC) in collaboration with the Japan Trade Promotion Agency (JETRO) and the Japanese Embassy in Vietnam, received nearly 100 solutions since its launch on August 29
The initiative is part of the “ASEAN – Japan Co-Creation Fast Track Initiative” co-chaired by the Ministry of Planning and Investment of Vietnam and the Ministry of Economy, Trade and Industry of Japan.
Minister of Planning and Investment Nguyễn Chí Dũng, speaking at the award ceremony, highlighted that the six winning solutions are outstanding innovations that can help businesses optimize processes and create practical value for society. Dũng emphasised that the program serves as a bridge to strengthen the connection between the business communities of Việt Nam and Japan and deepen bilateral ties.
“Vietnam – Japan Innovation: The Road to Success” was launched in a new and volatile context to find effective solutions which are expected to help turn challenges into opportunities, Dũng emphasised.
Japanese Minister of Economy, Trade and Industry Nishimura Yasutoshi said that 2023 marks the 50th anniversary of establishment of the diplomatic relations between Vietnam and Japan. Over the past 50 years, Japanese businesses have expanded their business in Việt Nam. The Japanese Business Association in Việt Nam has about 2,000 member companies operating in fields from electrical manufacturing, electronics, and automobiles to retail, information technology, and energy.
Japan expressed its commitment to supporting innovation projects in Việt Nam, particularly in digital transformation and green development, he said.
During talks between the two ministers, Minister Dũng requested continued attention and support from the Japanese Ministry of Economy, Trade and Industry for the Ministry of Planning and Investment and the NIC.
He also expressed hope that more Japanese technology enterprises, research institutes, and universities would establish offices, research and development (R&D) centres, and experimental manufacturing plants at the NIC’s Hòa Lạc facility.
The collaboration between Việt Nam and Japan in promoting innovation and fostering bilateral economic ties demonstrates their commitment to leveraging technological advancements for further development and addressing challenges in the changing landscape.
Legal framework essential to protect personal data, drive digital economy: experts
Việt Nam must establish a robust legal framework to manage and protect personal data in order to drive its digital economic growth while ensuring the privacy and rights of its citizens, experts said.
Speaking at the “Personal data in the flow of Việt Nam’s digital economy” conference last week in HCM City, Dr. Phạm Khánh Nam, vice principal of HCM City University of Economics, said data management had emerged as a critical factor in driving economic growth.
“Personal data is a productive resource in the data-based economy, and protecting personal data is crucial for promoting digital economic development,” he said.
“Data is a valuable asset in the digital economy, and if properly exploited and processed, can bring numerous benefits to investors and the economy.”
Việt Nam ranked third in Southeast Asia in digital economic development and achieved a growth rate of 16 per cent per year, according to a Ministry of Information and Communications report.
“However, data breaches have become increasingly common, and it is vital to effectively manage and protect personal information,” Nam said.
“The vulnerability of personal data has come to the forefront in recent years, with several major data breaches highlighting the potential risks,” he noted.
One of the problems is that large technology corporations often unintentionally control individuals’ behaviour by packaging personal and business information, according to Nam.
This has posed a challenge to policymakers who must establish a policy framework that is fair and beneficial to all parties involved.
Nguyễn Thanh Hòa, head of the Electronic Information Department under the HCM City Department of Information and Communications, said countries such as Singapore, Japan, and South Korea had achieved strong economies by effectively controlling the flow of data.
However, Việt Nam had yet to succeed in ensuring the security of personal data, leaving existing vulnerabilities unaddressed, Hòa said.
In addition, the advancement of digital technology, especially artificial intelligence, required the processing of a massive amount of personal data, which posed challenges to individuals, as it limited their freedom to make decisions regarding their personal information.
Nguyễn Quang Đồng, director of the Institute for Policy Research and Media Development (IPS), said regulations surrounding personal data must be established in the context of Việt Nam’s digital ecosystem and its roadmap of technological development.
As the digital space is global and data flows freely across borders, legal regulations must be adjusted in a global context to ensure equality and protect the rights of all parties involved, he added.
The event was organised by the Institute for Policy Research and Media Development and the College of Economics, Law, and Government of HCM City University of Economics.
Rattan, bamboo, sedge, and carpet exports hit nearly US$600 million in ten months
Vietnam’s exports of rattan, bamboo, sedge, and carpet during the 10-month period dropped by 14% to nearly US$600 million against the same period from last year, according to statistics released by the General Department of Vietnam Customs.
Most notably, October saw the country rake in US$60 million from exporting the products, representing an increase of 13.6% compared to the previous month.
With regard to export markets, the country’s rattan, bamboo, sedge, and carpet exports to the EU market in September reached US$11.52 million, down 20.8% compared to August and down 8.4% compared to the same period from last year.
During the nine-month period, exports of rattan, bamboo, rush, and carpet products to the EU accounted for 25.3% of the country’s total export turnover with US$136.44 million, marking a drop of 14.6 % compared to the same period from last year.
Meanwhile, exports of rattan, bamboo, rush, and carpet products to the US market in September hit US$17.80 million, representing a decline of 26.7% compared to August, but up 15.2% compared to September, 2022.
Overall, the nine-month exports of the product to the United States accounted for 37.8% of the country’s total export turnover with US$203.80 million, down 22.3% compared to the same period from last year.
Can Tho seeks investment from Republic of Korea in large-scale industrial production
Secretary of the Can Tho municipal Party Committee Nguyen Van Hieu has said the Mekong Delta city wants to draw investment from the Republic of Korea (RoK) in large scale industrial production.
During a working session with Korean Consul General in Ho Chi Minh City Shin Choong Il on November 7, Hieu noted that the Republic of Korea has invested in two official development assistance (ODA) projects in Can Tho, which are the Korea-Vietnam Incubator Park valued at 21.13 million USD, and an agriculture mechanisation project in Can Tho city with a total investment of nearly 2.4 billion KRW (over 1.83 million USD).
He said the RoK is strong in large-scale industry, hi-tech agriculture, trade and services which lay a solid foundation for bilateral cooperation, and suggested some projects for Korean investment. One project involves building a complex for processing and selling agricultural products in the Mekong Delta in Can Tho. Another is a logistics hub linked to the Cai Cui port with a total area of 100.27ha and the capacity to handle 25 million tonnes of goods each year.
Shin, for his part, pledged that in his capacity, he will act as a bridge to expand cooperation and bring many Korean business delegations to Vietnam and Can Tho in particular to explore investment opportunities.
According to the municipal Department of External Relations, Can Tho recorded an export-import turnover of 21.08 million USD with the RoK in the first nine months of this year, with primary exports of aquatic products, farm produce and processed agricultural products, apparel, pharmaceuticals, and veterinary medicine.