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Tag: Vietnam

  • Vietnam Airlines aims to start first US route in October

    Vietnam Airlines aims to start first US route in October

    Vietnam Airlines is planning to operate regular flights between Vietnam and the U.S. starting October, seeking to fulfill a dream of nearly two decades.

    The state-owned carrier will use either Boeing 787 or Airbus SE A350 aircraft for its inaugural U.S. route from Ho Chi Minh City to San Francisco with one refueling stop, CEO Le Hong Ha said.

    Since last year, the airline has been operating irregular charter flights to repatriate Vietnamese from the U.S. during the Covid-19 pandemic.

    The airline will rely on transporting cargo to offset initial low passenger demand, Ha said.

    Vietnam Airlines has been the worst-Covid-19-hit carrier in Vietnam. It has recorded a loss of about VND7 trillion ($306.65 million) in the first half this year, Ha commented.

    The airline in 2003 was ordered by the Ministry of Transport to begin direct services to the U.S. by 2005. However, concerns about profitability kept the airline from realizing the goal.

    Other Vietnamese airlines like budget carrier Vietjet and startup Bamboo Airways have all voiced interest in flying directly to the U.S.

    Bamboo Airways in May acquired slots to operate regular direct flights from HCMC to San Francisco and Los Angeles starting Sep. 1. But it is unclear whether flights would commence given the current severity of Covid-19 in Vietnam.

    In the first seven months of this year, Vietnamese carriers served 13.7 million passengers, down 32 percent year-on-year, according to General Statistics Office

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  • Carriers in dire straits and need support

    Carriers in dire straits and need support

    Vietnamese carriers are confronting major financial challenges as revenues plunge and debt soars. They need urgent government intervention to improve their cash flow, a report says.

    Since Covid-19 entered the country early last year, airlines revenues have plunged by 80-90 percent, according to a recent report by the Vietnam Aviation Business Association (VABA).

    National flag carrier Vietnam Airlines posted a loss of nearly VND5 trillion ($219 million) in the first quarter, the highest quarterly loss ever, and the Ministry of Planning and Investment has said that the company is on the verge of bankruptcy.

    Budget airline Vietjet is short of VND10 trillion to cover its expenses, and startup airline Bamboo Airways shares the predicament.

    The VABA report proposes that the government extends its support on airlines’ loans to include those registered since June 10 last year.

    The current support, including a delay in payment and a reduction in interest, only applies to loans recorded before that date.

    The report also proposes that the support lasts for three to six months after the government announces that the Covid-19 pandemic has ended or the country turns to “a new normal.” The carriers need time to recover after the pandemic has been contained, the report says.

    In the first seven months of this year, Vietnamese carriers served 13.7 million passengers, down 32 percent year-on-year, according to the General Statistics Office.

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  • 95 pct made-in-Vietnam auto parts for foreign brands

    95 pct made-in-Vietnam auto parts for foreign brands

    Nearly 95 percent of auto parts produced in Vietnam are for foreign brands, showing a lack of localization in the industry.

    Of the 287 items that have been approved by the Ministry of Science and Technology as of Aug. 17, 15 were registered for VinFast cars.

    The rest were all for foreign brands. A total 226 were for Toyota, 15 for Ford and 10 for Honda.

    This means Toyota accounts for nearly 79 percent of the registered items.

    None of these items include parts for Hyundai and Mazda vehicles, although TC Motor (which assembles Hyundai cars) and Thaco (which assembles Mazda cars) have both previously affirmed they had “high” localization rates.

    TC Motor claims the rate at around 20 percent.

    Most parts are frames, chairs, and wires that are considered basic. There are no complicated parts like engines and gearboxes.

    Vietnamese officials have been calling for a higher localization rate of cars produced in the country for over two decades but the target has not been achieved.

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  • Online market places for neighborhoods in Hanoi become popular

    Online market places for neighborhoods in Hanoi become popular

    With shops closed and delivery services facing restrictions due to the Covid-19 outbreak in Hanoi, apartment dwellers have stepped infill the supply gap by selling online.

    Thu, a clerk at a media company, who is working from home amid the social distancing, said: “I orders goods online for home delivery and pay through bank transfer. The goods are hung on my apartment door.”

    The online market, which serves Thu’s apartment block and others nearby, has over 2,000 members who buy and sell items like fish sauce, salt, cooking oil, rice, vegetables, fruits, meat, eggs, and processed foodstuffs, she said.

    Prices are slightly higher than at traditional markets, but people like Thu accept that because “we don’t have to go outside, minimizing contact and the risk of contracting the disease.”

    In the beginning many sold goods online for a little bit of extra income and even just for fun, but later, when their jobs were severely affected by the pandemic, it became their main source of income.

    “I order fresh pork from my hometown in the countryside, pack and deliver the meat to people in my residential area,” she said.Thai, a kindergarten teacher in Hanoi’s Ha Dong District, started selling foodstuff on an online market for residents of her apartment block when her kindergarten closed down.

    “Within 30 minutes of advertising pork online I often get orders for 50 kilograms.”

    Quang, an administrator of an online market of an apartment block in Cau Giay District, said the market sells essential goods with clear regulations on product quality and non-cash payment, and so has recently become busier, especially amid the Covid outbreak.

    Hanoi has gone over a month under a citywide social distancing order starting July 24, the longest such period since the novel coronavirus first appeared in the country. It has extended its social distancing order until September 6 as the novel coronavirus threat persists.

    The capital has recorded 2,909 local Covid-19 cases since the fourth coronavirus wave hit the country late April.

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  • Gojek launches car service in HCMC

    Gojek launches car service in HCMC

    Gojek on Thursday debuted its four-wheel ride-hailing service GoCar, first prioritizing healthcare workers before expanding to the public later this year.

    The Indonesian ride-hailing company started the service with 50 vehicles in Ho Chi Minh City dedicated to serving healthcare workers from five hospitals and medical command centers.

    All driver-partners are required to test Covid-19 negative before their first trip and on a weekly basis after that.

    Gojek has arranged for drivers to stay at hotels from now until late September when the city’s social distancing campaign is set to end.

    “We have made all the necessary preparations to launch GoCar this year,” said Duc Phung, Gojek Vietnam general manager.

    “When the pandemic escalated in HCMC and social distancing regulations were put in place, we pivoted quickly, adjusting the service to focus on supporting healthcare workers.”

    GoCar is the latest addition to Gojek’s line-up of offerings in the Vietnamese market, which include on-demand services for motorbike-hailing (GoRide), parcel delivery (GoSend) and online food delivery (GoFood).

    Its competitors Grab and Be have been offering car services for years.

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  • Vietnam leads globally in cryptocurrency adoption

    Vietnam leads globally in cryptocurrency adoption

    Vietnam leads globally in cryptocurrency adoption with 41 percent of respondents claiming to have bought Bitcoin and the like, according to a recent survey.

    Twenty percent of Vietnamese said they had purchased Bitcoin, the highest among 27 countries polled with 42,000 respondents, according to the survey by U.S. based financial consultancy Finder.

    “Remittance payments may have played a significant role in these numbers, with cryptocurrency an option for migrants who want to send money home and avoid exchange fees,” the report stated.

    Despite having the 53rd largest economy based on gross domestic product, Vietnam placed 13th in realized Bitcoin gains for 2020, according to Cointelegraph.

    Adoption was especially high in Asia, with 30 percent of respondents in Indonesia and India claiming to have bought cryptocurrency, the Finder’s survey found.

    In Malaysia and the Philippines, this proportion was 29 percent and 28 percent, respectively.

    There were between 1,160 and 2,511 respondents for each country covered in the study.

    Data from Statista in February showed Vietnam had the second-highest rate in terms of cryptocurrency use among 74 surveyed economies, driven by remittance payments.

    Bitcoin and other cryptocurrencies are not recognized as legitimate means of payment in Vietnam. The State Bank of Vietnam has warned that owning, trading and using cryptocurrencies are risky and not protected by law.

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  • China reopens border gate with Vietnam

    China reopens border gate with Vietnam

    China has reopened one of its border gates in Guangxi with Vietnam after closing it for several days due to Covid-19 fears.

    Trade resumed Wednesday at Tan Thanh Border Gate in the northern province of Lang Son after customs officials of both countries agreed on Covid-19 safety measures.

    There are over 1,000 trucks stuck at the gate and another major gate in the same province, Huu Nghi, said Nong Hai Thang, director of border gate management in Lang Son.

    “Trucks need to wait two days to pass the gate.”

    The delay is caused by China imposing more stringent examinations on vehicles and products to prevent Covid-19 contagion.

    There are 12 big and small border gates in Lang Son.

    Vietnam has recorded nearly 290,000 Covid-19 cases since the end of April.

    China was Vietnam’s second-largest export market in the first seven months with a value of $28.7 billion, up 24 percent year-on-year, according to the General Statistics Office.

  • Vietnam biggest buyer of Cambodia’s mangoes

    Vietnam biggest buyer of Cambodia’s mangoes

    Cambodia exported 140,000 tons of fresh mangos, or 86.8 percent of its total exports of the fruit, to Vietnam in the first seven months of this year.

    Citing data from the Cambodian Ministry of Agriculture, Forestry and Fisheries, the Vietnam Trade Office said the nation exported 161,228 tons of mangos between January and July, a year-on-year surge of 248 percent.

    Besides fresh mangos, Cambodia exported nearly 13,525 tons of mango jam, including 77 tons to Vietnam, 1,000 tons to Thailand and 11,000 tons to China in the seven-month period.

    Cambodia, which cultivates mangoes on 126,668 hectares at present, exported 845,274 tons of mangos worth over $473.2 million last year, mostly to Vietnam, Thailand, China, South Korea, Singapore, Russia and France.

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  • Instant noodle producers gain from Vietnamese craving

    Instant noodle producers gain from Vietnamese craving

    Noodle companies in Vietnam posted strong figures last year as the country became the third-largest market globally with over 7 billion servings.

    Masan Consumer, which makes Omachi and Kokomi noodles, saw revenues from packaged food, including noodles, rising 38.5 percent from 2019 to nearly VND6.9 trillion ($302 million) last year.

    Sales of Omachi noodles rose 32 percent, with the brand claiming 45 percent of the high-end market. Omachi was also the best-selling noodle brand in supermarkets.

    In the mid-end segment, Kokomi saw sales growing 43 percent to become the best-selling brand in the northern region.

    Masan Consumer continued to post strong figures so far this year with revenue growing 10 percent to VND11 trillion.

    The company expects instant noodles and porridge products to rise double-digit for the whole year.

    Japanese producer Acecook posted revenue of VND11.5 trillion last year, 1.6 times that of Masan Consumer’s packaged food sales.

    The company claims to account for half of Vietnam’s instant noodles market. It forecasts sales to reach 350 million products next year, twice that of 2017.

    Smaller noodle producers also recorded stable figures. HCMC-based Vifon leaders once told press it made around VND200 billion a month.

    Another company, Colusa-Miliket, saw revenue falling 2 percent to VND624 billion last year.

    There are about 50 noodle businesses in Vietnam including foreign companies. The country exports to 40 markets.

    Vietnam became the third-largest instant noodles market with over 7.03 billion servings consumed last year, up two places from a year before.

  • Vietnam world’s third largest instant noodles market

    Vietnam world’s third largest instant noodles market

    Vietnam has become the world’s third-largest instant noodles market with over 7.03 billion servings consumed last year, up two places from a year before.

    This is an increase of 29 percent from 2019 and a new record for the country, according to data from the World Instant Noodles Association (WINA).

    The latest figure means that Vietnam accounted for around 6 percent of instant noodles servings in the world. Each Vietnamese consumed 55.6 servings last year.

    The country ran behind China and Indonesia with 46.35 billion and 12.64 billion servings, respectively.

    India and Japan make up the top five instant noodles consumers in the world.

    The surge in instant noodles consumption in Vietnam has happened as the country dealt with two major Covid-19 outbreaks last year, forcing people to stay at home under social distancing orders.

    Global consumption of instant noodles rose nearly 10 percent in 2020 to 116.56 billion servings, WINA data shows.

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  • Fees for transporting goods to HCMC nearly quadruple

    Fees for transporting goods to HCMC nearly quadruple

    Many HCMC residents have reported paying higher fees for transporting goods from their hometowns to the city compared to the pre-Covid period.

    Hoa in Ho Chi Minh City’s Go Vap District said that amid the city’s strict social distancing order, she had recently told relatives in the Central Highlands province of Kon Tum to send her a 15-kilo parcel of groceries including vegetables, meat and fish through an interprovincial coach company.

    The fee for transporting the parcel from Kon Tum to a coach station in HCMC was VND200,000 (nearly $8.77), instead of the typical VND50,000. On arrival, the coach company hired a shipper to transport the parcel to Hoa’s home for VND150,000, instead of VND50,000.

    An in HCMC’s Binh Thanh District said she had to pay total transport fees of VND600,000 for a 20-kilogram parcel sent from Kon Tum to her home in the city. “I have lived in HCMC for 10 years, and have never seen such high transport fees,” she said.

    Traders also have to pay higher fees to interprovincial coach firms. “Sometimes the value of goods is over VND1 million, but the transport fee is nearly half of that,” said Loan, a seafood trader in the central province of Phu Yen.

    Mai, a potato trader in the central highlands region, said transport fees for goods from the region to HCMC have surged four times to VND800,000 from VND200,000. There are fewer interprovincial coaches running between the region and HCMC, so coach firms have increased their fees, she explained.

    Tan Anh Coach Company in Kon Tum said passenger coaches are banned from running to HCMC, so lorries are used to transport goods with longer travel times and larger freights. “In the past, it took vehicles 10-12 hours to run from Kon Tum to HCMC. Now, it takes 18-20 hours. We have to cover Covid tests, and more expensive fuel,” the coach company revealed.

    Coach firms in other provinces, including Phu Yen and Khanh Hoa also said goods-transporting vehicles consume more fuel than passenger coaches.

    Meanwhile, shippers in HCMC explained that tightened social distancing, including travel restrictions, upped transport fees. “Each shipper is allowed to operate in a certain district, passing through many checkpoints,” Thanh from Go Vap District said.

    Ho Chi Minh City has recorded nearly 135,500 local Covid-19 cases since the fourth coronavirus wave hit Vietnam in late April. It is now the country’s pandemic epicenter.

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  • Quick vaccination key to ensuring smooth supply chain

    Quick vaccination key to ensuring smooth supply chain

    The delay in vaccinating workers in the retail and logistics sectors is causing disruptions in the supply chain, a key player in the Covid-19 fight.

    Earlier this month, nearly 40 VinMart and VinMart+ outlets had been closed for several days due to Covid-19 linkage, which urged its operator Masan to once again request the government to quickly vaccinate retail staff.

    The Ministry of Industry and Trade had in June also called for these employees to be vaccinated early as they come into direct contact with millions of customers every day and are at high risk of contagion.

    In retail chain BRG Mart, 30 percent of staff have received their first dose. The ratio for conglomerate Masan is 16 percent, Bach Hoa Xanh (operated by Mobile World) 21 percent, MM Mega Market over 30 percent, and Co.opmart Hanoi 30 percent.

    Nguyen Thi Kim Dung, CEO of Co.opmart Hanoi, of which one supermarket was closed for three days due to Covid-19 linkage, said social distancing alone is not enough to reduce the risks for retail workers.

    “The earlier these employees are vaccinated the sooner customers are protected.”

    Dung said Co.opmart had made the request to different government bodies but all had stated vaccines were not available.

    Retail workers, however, are only part of the supply chain.

    Le Duy Binh, CEO of market research company Economica Vietnam, said drivers, shippers, and customs officers also need to be prioritized as they serve in the frontline of the economy and deliver essential goods.

    Although government officials have demanded shippers be prioritized for vaccination, experts say the process needs to be sped up amid a surging number of Covid-19 cases.

    Economist Phung Duc Tung said vaccines are being distributed mostly to localities when instead it should be distributed to sectors to ensure the flow of essential goods.

  • Adidas hit by China boycott, Vietnam factory closures

    Adidas hit by China boycott, Vietnam factory closures

    Adidas felt the impact of a Chinese boycott of Western brands on its second-quarter results and is also suffering from the closure of factories in Vietnam due to Covid-19 infections.

    The German sportswear company still raised its outlook for full-year sales and profitability as it said it has seen demand recover in China since calls for a boycott in late March, and said it hopes to restore production in Vietnam soon.

    But Adidas shares were down 4.1 percent by 9:50 GMT as analysts noted that its growth was lagging rivals Nike and Puma, which both reported that sales nearly doubled in recent earnings releases.

    Second-quarter sales at Adidas rose 52 percent to 5.077 billion euros ($6 billion), while operating profit came in at 543 million euros, ahead of analysts’ average forecasts.

    Adidas raised its 2021 outlook to predict sales will grow up to 20 percent, and net income from continuing operations will reach 1.4-1.5 billion euros. That compared to Puma’s forecast for sales to rise at least 20 percent for 2021.

    Adidas already saw online sales return to growth in China in June, Chief Executive Kasper Rorsted told journalists, adding he expects the country to record strong growth for the full year and he welcomed a government drive to promote youth sport.

    The company hopes to be able to restart production in Vietnam after the scheduled end of a coronavirus lockdown on Aug. 15 and is working on reallocating production to other centres in the meantime.

    Vietnam usually accounts for 28 percent of Adidas sourcing and its factories mostly make shoes for the company, with a lag of three to four months before products hit the shelves.

    The combined impact of supply chain problems, new Covid-19 lockdowns in Asia and tensions with China could amount to more than 500 million euros in lost sales in the second half, said finance chief Harm Ohlmeyer.

    Ohlmeyer added he expects Adidas to seal a deal to divest the underperforming Reebok brand by the end of the summer.

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  • Delivery companies miss out on demand surge amid stay-at-home orders

    Delivery companies miss out on demand surge amid stay-at-home orders

    Delivery companies are unable to capitalize on rising demand since drivers are not keen amid mobility restrictions and delayed vaccination. Hung, a shipper in Hanoi, has shut down his driver’s app for over a week now after the city imposed travel restrictions.

    Through his company, AhaMove, does provide paperwork for the 22-year-old to pass through checkpoints set up to discourage people from coming out into the streets, he is concerned about contracting Covid and spreading it at home.

    “It is difficult financially, but since I do not know when I’ll be vaccinated, I’d rather stay at home for safety,” he said.

    Nghia, who works for Grab, does not have the liberty to make that choice since the city does not allow his company to operate.

    Hanoi allows delivery people from supermarkets, e-commerce platforms and postal services but not from ride-hailing companies like Grab, Be Gojek, MyGo, and FastGo.

    “It is unfair. Three or four trips a day would help me earn enough for food, but we cannot do anything but wait.”

    The shortage of drivers and ambiguous and inequitable regulations mean delivery companies are unable to take advantage of the surging demand amid the lockdowns in Hanoi and HCMC.

    AhaMove reported a tenfold rise in the number of orders after the lockdown began, but it cannot accept much of them since its drivers are not allowed past checkpoints. Hanoi does not allow delivery of “non-essential” goods.

    “Many shippers refrain from working since they have to pay for their own Covid-19 tests,” Tuoi Tre newspaper quoted Phan Tuong Bach, operating director of AhaMove, as saying.

    In HCMC, there are times when the number of orders is triple the normal rate, but a driver shortage means they could not be accepted, he said.

    There is also confusion occasionally as authorities in Hanoi and HCMC abruptly change regulations catching delivery companies unawares.

    AhaMove last week had to apologize to its drivers and customers in HCMC after some of its drivers were fined for delivering goods after 6 p.m. amid a ban on people leaving their homes at night.

    Startup Loship is facing similar difficulties as many of its drivers had stopped working.

    CEO Nguyen Hoang Trung said working conditions have become extremely difficult for delivery people because of lack of clarity on what constitute essential goods.

    The company has doubled the minimum income in the hope of attracting more drivers back to work.

    Be Group saw orders rise tenfold in mid-July but had to suspend operations two weeks later to keep its drivers safe.

    Ride-hailing giant Grab asked to be allowed to deliver food, saying Hanoi’s suspension of its services while allowing other delivery companies to operate goes against its policy on fair competition. But its demand has yet to be approved.

    HCMC has had strict social distancing regulations since July 9, and they will continue until August 16. Its Covid-19 tally now is more than 112,000.

    Hanoi is in the 14th day of a 15-day social distancing campaign. The city has had nearly 1,800 cases.

  • Garment firms fear order plunge

    Garment firms fear order plunge

    Vietnam, the world’s second-biggest garment exporter, is facing the risk of losing orders to competitors amid the complicated Covid-19 situation in August.

    Gia Dinh Group JSC in the southern province of Binh Duong has secured orders till the end of December, but face higher material prices plus late shipments, along with higher logistics costs. The company’s management board said if the pandemic prolongs, it would fail to fulfill its orders.

    Over 80 percent of garment and textile enterprises in the southern region have had to either lower labor productivity or suspend operations to combat the disease.

    Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS), said production in August is “extremely difficult”, especially for firms in southern localities imposing social distancing. Up to 90 percent of production chains in the south have been broken.

    Meanwhile, only 70-80 percent of garment and textile companies in the northern region are still operating.

    Delivery pressure amid outbreaks is a big challenge for garment and textile enterprises now, he said, stating that if they fail to meet delivery deadlines, their customers would cancel orders, which will affect production both this year and the next.

    “If the Vietnamese market is not stable, partners will shift orders (to other countries). Garments are seasonal. Nobody wants to buy outdated clothes though they are on sale,” the VITAS chairman said.

    The Ministry of Industry and Trade also stated garment and textile enterprises in Vietnam are facing the risk of international clients postponing or canceling orders, and shifting their focus to other countries. “When the pandemic is controlled, it will be very difficult to resume business relations, and that will take time,” the ministry said.

    The VITAS chairman also mentioned the risk of labor shortages. Many workers have left Ho Chi Mih City for their hometowns to avoid being infected with the coronavirus, and only 60-65 percent may return to the city when the Covid-19 outbreak is pushed back, according to Giang. “There will be rather severe labor shortages in the coming time,” he predicted.

    Vietnam exported $18.6 billion worth of textile and garment products in the first seven months of this year, a year-on-year increase of 14.1 percent, according to the General Statistics Office.

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