The Vietnamese logistics sector is eyeing the urgent need for renovation, overall solutions and vision as well as new development orientations to catch up with the global trend, creating a breakthrough for the country’s socio-economic recovery and development, according to experts.
Vietnam ranks 11th out of the 50 countries in the 2022 Emerging Market Logistics Index released by logistics and freight provider Agility.
The country’s freight and logistics market is expected to grow at a compounded annual growth rate of 5.5% in 2022 – 2027. Its economy has posted a strong recovery this year, growing at 8.93% in the first nine months.
Vietnam’s foreign trade was worth 557 billion USD in the period, representing a large freight and logistics market.
However, Le Thi Ngoc Diep, Director for Trade of SLP Vietnam, said that the standards of the storage and warehouse system have remained modest, while many logistics firms have yet to be able to join the global supply chain. Meanwhile, the demand for a modern logistics system that combines automation and meets the growth of retailers and the e-commerce industry in Vietnam is very high.
Hoang Quang Phong, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI), proposed the setting up of an inter-sectoral working group between the Ministry of Transport and the Ministry of Industry and Trade to review and remove difficulties and support the logistics industry by proposing policies and solutions to serve the development of projects to promote Vietnam’s economic growth in the context of escalating logistics costs and shortages in serious containers in 2021.
Dao Trong Khoa, deputy chairman of the Vietnam Logistics Business Association, said the logistics industry is benefiting from free trade agreements and the rapid growth of e-commerce. E-Logistics has leveraged the efficiency of logistics services, he said.
Ten-month foreign investment declines: FIA
Foreign capital inflows fell whereas realised capital rose in the first 10 months of 2022.
According to the Foreign Investment Agency (FIA), Ministry of Planning and Investment, the total newly-registered capital, adjusted capital, and capital contribution and share purchase stood at US$22.46 billion by October 20, down 5.4 per cent year-on-year.
Specifically, 1,570 projects were granted investment registration certificates during the period, with total registered capital of $9.93 billion, down 23.7 per cent against last year.
One bright spot was realised capital, which topped $17.45 billion in the first ten months of the year, 15.2 per cent higher than the same period last year. It was expected to hit $22 billion by year-end.
Adjusted capital, as a single item itself, reached over $8.74 billion, up 23.3 per cent year-on-year. Roughly 880 projects registered for capital adjustment during the ten-month period.
There were 2,997 capital contributions and share purchases by late October, equivalent to $3.97 billion. The figure was 4.5 per cent higher than that in 2021.
On the bright side, many large-scale projects had their capital adjusted up significantly in ten months. For instance, Samsung Electro-Mechanics Vietnam was given two capital boosts, of $920 million and $267 million.
Samsung HCMC CE followed suit with $841 million. The projects to manufacture electronics and multimedia devices in Bac Ninh, Nghe An and Hai Phong provinces were financed with additional capital of $306 million, $260 million and $127 million, respectively.
The FIA census also showed that foreign investors invested in 18 out of 21 sectors of the economy during the period. Of which, processing and manufacturing took the lead in terms of foreign investment, with $12.9 billion.
Realty estate came next with a total investment of $3.9 billion, followed by electricity production and distribution with $928 million and scientific and technological activities with $835 million.
It is also worth noting that wholesale and retail, processing and manufacturing, and scientific and technological activities were the sectors with the largest number of newly-registered projects, accounting for 29.9 per cent, 24.8 per cent and 16.7 per cent of the total number of newly-register projects in the country.
By partners, 103 countries and territories poured money into Viet Nam over the year. Singapore was on top with $5.3 billion, accounting for 23.8 per cent of the total foreign investment into the country.
Japan came second with $4.2 billion and South Korea came third with $3.9 billion. Other names further down the list included China, Hong Kong (China) and Denmark.
Despite its third position regarding investment capital, South Korea topped the list of investors when it comes to the number of newly-registered and capital-adjusted projects in the ten-month period.
HCM City’s IPs, EPZs to attract 2.4 times more investment per hectare by 2025
The HCM City Industrial and Export Processing Zones Management Board (HEPZA) has set a target to increase the average investment per hectare of industrial land to US$15 million by 2025 from a current $6.32 million.
Currently, each hectare of industrial land at IPs and EPZs in HCM City attracts $6.32 million worth of investment, generating $46.71 million worth of exports and creating jobs for more than 144 workers.
HEPZA plans to pilot the programme at four IPs: Tan Thuan EPZ in District 7, Tan Binh IP in Tan Binh District, Hiep Phuoc IP in Nha Be District, and Cat Lai IP in Thu Duc City.
Hiep Phuoc IP is selected to be the first in HCM City to pilot the model. HEPZA also wants to build two new industrial zones in Binh Chanh District, the 320ha Le Minh Xuan 2 Industrial Park and 670ha Pham Van Hai Industrial Park, to house clean, advanced and high-tech industries.
The quality of human resources remains an issue in IPs and EPZs with the proportion of workers with university degrees dropping from 11 per cent in 2006 to 8 per cent this year, according to HEPZA’s statistics. More than 281,000 workers are working in EPZs and IZs in the city, accounting for 6 per cent of the city’s employees.
EPZs and IZs in the city attracted $601 million of investment last year, well above the target, including foreign investment of $220 million, according to HEPZA. As of the end of September, they had attracted 1,674 projects worth more than $12 billion, of which foreign investment accounted for 45 per cent.
They attract more than $260 million in foreign investment annually, accounting for 58 per cent of the city’s foreign investment. The city has 17 IPs, EPZs and high-tech parks covering a total area of more than 3,800 hectares. It targets having 23 ‘green’ high-tech EPZs and IPs covering 6,000ha. Tan Thuan Export Processing Zone was the country’s first EPZ established in 1991.
Chairman of EuroCham Vietnam: The SBV’s efforts were commendable
As exchange rate pressure grows when circumstances are unfavourable, the State Bank of Vietnam (SBV) has raised the operational interest rates by 100 basis points (1 per cent) before the November Fed meeting on October 24, according to a report recently provided by the SSI.
In addition, SSI predicts that deposit and lending interest rates will likely continue to rise by an additional 50 to 100 basis points by the end of the year due to the deteriorating financial environment.
The cash flow of the banking system improved during the week of October 17 to October 21, and the SBV returned immediately to the government to increase the interbank VND interest rate level and create a safe distance from the USD interest rate.
The volume of freshly issued 7-day notes was around $5 billion, while the total net withdrawal reached over $4.95 billion.
The SBV altered the bidding procedure for bills from interest rate bidding to volume bidding and set the prevailing interest rate at 5 per cent per year in an effort to increase the money market interest rate. At the end of the week, the interbank lending rate reached 4.64 per cent, which is only 30 basis points higher than it was last week.
According to SSI, following the SCB incident, transactions in the money market were largely fragmented and concentrated on banks with low bidding interest rates, resulting in a sharp decline in interest rates. In comparison to the previous week, the average daily trading volume of overnight terms fell by 16 per cent.
Alain Cany, chairman of the European Chamber of Commerce in Vietnam (EuroCham Vietnam), said the US interest rates are inevitably rising, and so are the SBV’s recent interest rates, adding that the interest rate level in Vietnam is currently higher than in more developed countries because the dollar is increasing strongly.
Retail segment brightens bank profit picture
Many banks have unveiled their third-quarter business results, showing a spike in their profits, leveraging well-conceived retail lending development strategy amid restricted credit line.
The retail segment once again proved its pole role at VPBank in the third quarter of 2022 when credit outstanding balance from individual customers, small- and medium-sized enterprises (SME), and at FE Credit contributed nearly 70 per cent of the bank’s total credit outstanding balance, growing approximately 20 per cent on-year.
Meanwhile, credit outstanding balance in retail segment at VIB surpassed $8.69 billion in the third quarter, placing the bank in the group of top performers among private commercial lenders.
By the end of third quarter, VIB’s credit outstanding balance contributed more than 35 per cent of total spending volume by Mastercard holders in Vietnam. Simultaneously, thanks to strong digital transformation, in the first three quarters of 2022 VIB eyed digital bank transaction value more than double compared to 2021 and accounted for 93 per cent of total transactions through digital channel.
In the first nine months this year, TPBank eyed a 78 per cent hike on-year in services revenue, which touched $81.56 million. Its pre-tax profit during the period amounted $261 million, an increase of $66.6 million, equal 35 per cent on-year, and reaching 72 per cent of full-year projection.
According to Nguyen Duc Thach Diem, CEO of Ho Chi Minh City-based Sacombank, non-interest income contributed 39.4 per cent of the bank’s total income sources in the first nine months.
This was mostly thanks to strong digital drive, from there making positive contribution to bolstering Sacombank’s financial efficiency.
Techcombank CEO Jens Lottner unveiled that the bank posted 21.8 per cent growth in its pre-tax profit in the first three quarters, reaching $904.3 million thanks to efficient business in core fields, with augmented lending in retail segment.
ACB’s credit portfolio is also focused on retail segment, reaching 94 per cent, placing ACB among lenders with efficient operation. By the end of the third quarter, ACB raked in $587 million in pre-tax profit, fulfilling more than 90 per cent of the full-year projection.
The analytic division under Agribank Securities (Agriseco Research) made a forecast that the banking sector’s profit picture in 2022 and 2023 would be less upbeat compared to the past two years due to limited space for credit growth, meanwhile banks’ profit margin is under pressure when the deposit rate tends to go up while it is not simple to raise lending rate correspondingly.
HCMC ranks first nationwide in FDI attraction from Jan-Oct
HCMC has taken the lead among Vietnam’s preferred destinations for foreign direct investment (FDI), attracting US$3.42 billion of foreign capital in the year to October, according to data from the Ministry of Planning and Investment.
The amount of foreign capital poured into HCMC during the given period made up some 15% of the country’s total and improved by around 25% against the same period last year.
Besides, the southern city ranked first in the country by the number of newly-registered projects and capital contributions, accounting for 44.1% and 67.2% of the country’s total figures, respectively. As for the number of FDI projects seeing capital adjustment, HCMC came second (15.3%), just after the capital city of Hanoi (18.8%).
Foreign investors have injected capital into projects across 54 provinces and cities, with the total amount of newly-registered, adjusted and contributed capital to buy a stake in the year to October 20 reaching over US$22.46 billion, down 5.4% compared to the year-ago figure.
The southern province of Binh Duong ranked second in the country as it lured over US$2.85 billion worth of FDI, a year-on-year increase of 40%. Quang Ninh in northern Vietnam secured third place, with nearly US$2.19 billion channeled into FDI projects in the province, surging almost 89% over the same period last year.
Drug certificate expiry leads to risk of medicine shortfall
Vietnam may face a medicine shortage as over 40% of drug registration certificates will expire at the end of the year, the Ministry of Health said. According to the ministry, Vietnam has issued over 24,000 drug registration certificates. Some 10,000 are expected to expire on December 31, while the figure will amount to nearly 14,000 next year.
Pharmaceutical supplies have met the demand this year, but the nation will be at risk of drug shortage if the ministry does not promptly extend the expiry dates of the circulation certificates for nearly 14,000 drugs.
Given the current capacity, it took the ministry a month to extend 500 certificates and 24 months for all 14,000 near-expiry certificates.
If new regulations are not issued, a huge volume of pharmaceutical products will be banned under the 2016 law on pharmacies, adversely affecting socioeconomic conditions.
Meanwhile, the shortage would impact medical services and incomes at hospitals, as patients may go abroad for medical treatment, health experts said, adding that pharmaceutical firms may suspend or limit their business activities, worsening unemployment in the pharmaceutical sector.
Thus, the ministry has proposed the Government allow certificates of circulation registration that expire between January 1, 2023, and December 31, 2014, to remain valid.
Medicine circulation registration is aimed at ensuring drugs are circulated in line with regulations and used safely and effectively. If the certificates of circulation registration expire, firms must propose an extension for them.
Air passengers forecast to reach 100 million this year
The country’s air passengers are expected to reach 100 million in 2022, according to the Civil Aviation Authority of Vietnam (CAAV).
In the January-October period, some 81 million passengers traveled through local airports, said Dinh Viet Thang, head of CAAV. The agency targeted to serve 100 million passengers at local airports by the end of the year. In 2019, airlines carried almost 120 million passengers nationwide.
Vietnamese carriers handled around 40 million passengers out of the total. The figure is planned to exceed 55 million by 2022. Between January and October, the domestic market saw a strong recovery, with passenger numbers jumping by 12% compared to the same period in 2019.
Still, challenges remain in the inbound market, given its performance now being half of the pre-pandemic operation.
According to Thang, “resuming international flights to several major markets has been hindered by Covid-19 restrictions, particularly in China”. Meanwhile, demand from the nations and territories that reopened to tourism, namely South Korea, Japan and Taiwan, was low, added Thang. In the last 10 months, India has emerged as an important market due to rising tourist flows.
Quang Ngai shelves two solar farms on An Khe lagoon
The central province of Quang Ngai has withdrawn its proposal to add two solar power projects on An Khe Lagoon, which is part of the Sa Huynh cultural relic complex, to the national power development plan.
The province on October 26 said it asked the provincial Department of Industry and Trade to work and report the withdrawal of the proposal to the Ministry of Industry and Trade, reported the local media.
The departments, agencies and relevant units in the province were also urged to prepare and complete documents and scientific research related to the Sa Huynh complex before November 30.
Previously, when the province proposed building solar farms on the An Khe Lagoon, environmental and heritage experts, as well as local residents strongly opposed the plan.
ETC proposed for roadwide parking fee collection
The Voluntary Youth Public Benefit Service Company Limited has proposed the government of HCMC replace the mobile app “My Parking” with electronic toll collection (ETC) systems.
According to the company, the My Parking app has proven to be inconvenient for both car owners who park their vehicles along certain roadsides and the operator due to the time-consuming process and errors.
ETC enables easy top-up and helps improve revenue by 30-50% and cut staff by 50% and software rent by 40%.
The company said that if the proposal is approved, ETC systems can be installed in early December.
The city government has sent documents to relevant agencies for review and consultation. The My Parking app has been used to collect parking fees since 2018, with a charge ranging from VND20,000 to VND40,000 per hour.
Fuel company director in HCMC arrested for diesel theft
The police have pressed charges against the director of Phuc Tho Petroleum Transport Trade Company Limited in HCMC, Nguyen The Hung, and his two subordinates for stealing 80 tons of diesel oil.
A further investigation has been carried out to clarify signs of fuel theft and smuggling and determine whether anyone else was involved in the crime.
Previously, Hung directed his subordinates to take a barge to Nha Be Petroleum Warehouse, receiving 110 tons of diesel oil on February 22.
Before delivery to Petrolimex Ba Ria Vung Tau Company, Hung asked his subordinates to open the seals and pump 80 tons of diesel oil into two other barges.
Several days later, this volume of oil was transferred to another delivery vehicle and detected by the local officials.
According to the police, the 80 tons of diesel oil that Hung and his men stole is worth VND1.5 billion.
Gas stations run out of fuel due to lack of storage tanks
From the beginning of October to the present, around 9-10 percent of 550 gas stations in the city are facing petroleum supply disruption due to temporary fuel shortages. The reason is that small petrol stations have not got enough storage tanks and depend on suppliers suspended from importing fuel in time.
HCMC has currently three petrol stations that are temporarily closed for maintenance and repairs and another stopped selling gasoline. The municipal Department of Industry and Trade had working sessions with large-scale petroleum wholesalers on extending operating hours and sharing supply resources with small retailers, she informed.
Regarding the information about educational facilities starting too early, Chief of Office of the HCMC Department of Education and Training Ho Tan Minh said that the department checked and rectified matters.
According to current regulations, preschool, primary and high schools start at 7 am while secondary schools begin at 7.30 am. Educational facilities must open at 6.30 am. In case there are several schools that are located on a street, the local authority will arrange the start time of each facility.
Deputy Director of the HCMC Center for Disease Control (HCDC), Le Hong Nga affirmed that the recently confirmed cases of monkeypox are less likely to spread in the community. HCMC has maintained the monitoring system at border gates to identify suspected cases of monkeypox.
Chief of Office of the HCMC Health Department Le Thien Quynh Nhu expressed concern over a growing increase in the number of healthcare workers quitting their jobs, especially the nurse force. This directly affects healthcare quality at grass-root medical facilities.
Hanoi to have three more UNIQLO stores
UNIQLO, a brand of Japan-headquarted retailer Fast Retailing, will open a new store at Vincom Ba Trieu on October 28, with the expectation of becoming a shopping destination for residents and tourists to the capital.
As part of the expansion plan in Hanoi and the northern region, two new UNIQLO stores will open this year in Vincom Tran Duy Hung and Vincom Royal City.
At a July meeting with Vice Chairman of Hanoi People’s Committee Nguyen Manh Quyen in Hanoi, Noriaki Koyama, Head of CEO Office of Fast Retailing, a large retail holding company with its pillar brand UNIQLO, shared that the group will expand its business network nationwide and promote domestic production and talent development in Vietnam.
Vietnam effectively adopts tax payment extension for economic recovery
In the first 9 months of 2022, the State applied various policies to extend tax payment time for businesses in hope of quicker economic recovery speed. This financial aid is worth tens of thousands of VND.
In particular, Vietnam approved the payment extensions for VND6.37 trillion (US$256.4 million) of special consumption tax, VND51.32 trillion ($2.07 billion) of value added tax.
The amount of tax that businesses and organizations had to submit to the State was VND15 trillion ($603.8 million), while the rest of VND36.3 trillion ($1.46 billion) is allowed to be handed in later.
In addition, the corporate income tax of around VND40 trillion ($1.61 billion) for the first and second quarter this year is subject to this extension. VND30 trillion ($1.2 billion) so far has been paid.
The State has already introduced policies to help taxpayers, effective in 2022:
_reducing the value added tax from 10 percent for any merchandise and services currently applying this rate to 8 percent (lasting until September 30, 2022), creating a tax income drop of VND16 trillion ($644 million);
_reducing the environmental protection tax for airplane fuel, resulting in a tax income drop of VND1.18 trillion ($47.5 million);
_reducing the environmental protection tax for petrol except for ethanol, diesel oil, mazut oil, lubricants, greases, and kerosene oil, causing a tax income drop of VND13.92 trillion ($560.3 million).
Nearly 500,000 SMEs supported with digital transformation
The number of small- and medium-sized enterprises (SMEs) getting access to the digital transformation support program increased from 190,000 ones in April to more than 490,923 by September this year, accounting for 61 percent of the total number of enterprises nationwide.
In late January this year, the Ministry of Information and Communications (MIC) officially rolled out a program to support digital transformation of SMEs, called SMEdx. It is part of a series of projects to support SMEs in digital transformation via “Make in Viet Nam” platforms.
As of September, more than 62,000 firms use platforms of the SMEdx, making up 13 percent of the total number of SMEs benefitting from the program.
The corporate governance platform is widely deployed by enterprises with 39.8 percent, followed by human resource and organization 17 percent, tourism and hospitality 16 percent, technology infrastructure 14 percent and finance and accounting 10 percent.
Some localities reported the high proportion of SMEs using SMEdx including Ha Noi (34 percent), Ho Chi Minh City (32.7 percent), Da Nang City (11.5 percent), Ca Mau province (7.5 percent) and Binh Duong province (2.5 percent).
Strengthening public-private partnership and digital transformation in tourism
In the first nine months of 2022, there were over 1.8 million international visitors to Viet Nam, reaching about 30 percent of this year’ preset target.
With only two months left until the end of the year, experts and regulators proposed many solutions to quickly recover the “smokeless industry”, in which public-private partnerships and digital transformation were considered driving forces for international tourism development.
Viet Nam was also ranked No. 1 among the 25 countries with the fastest recovery of the domestic aviation market in the world after the pandemic.
According to a survey by Indochina Capital Group and Wink Hotels, 64 percent of travellers use online channels and online travel agencies (OTAs) to book rooms, and 91 percent are interested in digital advertising from hotels.
The South Central Coast strives to attract international tourists
Opening to tourism under the new normal, localities in the South Central Coast focused on solutions to restore and develop tourism in association with “safe adaptation to Covid-19”.
According to statistics on the tourism industry in Binh Dinh, Phu Yen and Khanh Hoa provinces, the number of arrivals, including international tourists, has increased sharply since the beginning of 2022.
Specifically, the total number of visitors to Binh Dinh in the past nine months reached 3.5 million, up 200.3 percent over the same period. In Phu Yen, the total number of visitors to over 1.8 million in 10 months, an increase of 444.7 percent, and in Khanh Hoa – 2,116,093, a rise of 342.4 percent.
The above results were thanks to the tourism development cooperation programs, market expansion and development; efforts in raising competitiveness; and direct international route improvement of the South Central region.
In terms of potential, Binh Dinh, Phu Yen and Khanh Hoa share the same strengths regarding geographical location, sea and islands. However, each province has its characteristics.
Currently, the three provinces are coordinating to implement the program “Tour one-way trip with three destinations to Binh Dinh-Phu Yen-Khanh Hoa” towards sustainable development, product diversification and extension of the visitor’s stay.
Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes
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