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Tag: Vietnam

  • Vietnam’s hassles in developing offshore wind power industry

    Vietnam’s hassles in developing offshore wind power industry

    Unclear regulations, low prices and an insufficient grid are hampering efforts to develop offshore wind power, experts and industry insiders have said. By 2030 offshore wind power capacity would be 7,000 megawatts (MW), envisages the Power Development Master Plan VIII for 2021-30.

    But Nguyen Thi Thanh Binh, deputy director of conglomerate T&T Group, said at a conference last week that ambiguous regulations are the biggest hurdle to achieving the government’s goal.

    “A policy framework, construction roadmap or pricing mechanism for offshore wind power plants has yet to be drawn up, and there is also a lack of specific, clear instructions.”

    Offshore wind farms usually take six to nine months before commercially operating, and so it is a huge risk for investors if the mechanism is unclear, she added.

    Bui Van Thinh, chairman of the Binh Thuan Wind and Solar Energy Association, spoke about another problem: Vietnam’s power grid.

    “The country’s grid for renewable sources is already overloaded, and so it cannot benefit from more supply.”

    Upgrading the power system to cope with the targeted load requires a huge investment, and national utility EVN has no incentive to do it as it buys renewable energy at a loss.

    Meanwhile, the newly amended Law on Electricity allows private investors to fund power grids, but lacks specific instructions for implementation.

    Last October the Ministry of Industry and Trade stopped the feed-in-tariff (FIT) incentive price for wind power projects. It is now seeking feedback on bidding mechanisms for renewable energy prices.

    But Binh warned against doing that now, saying both investors and the market would be hurt.

    “Offshore wind power is a relatively new sector in Vietnam, and some investors are considering them test runs.

    “Bidding in this case will disrupt the market, and investors may decide to forfeit them after winning bids.”

    Mark Hutchinson of the Global Wind Energy Council pointed to the fact that no country has been able to install 3,000 MW of offshore wind power through bidding in early stages.

    Citing the experiences of the UK, the Netherlands and Taiwan, he said investors need to have a buffer time before bidding starts. FIT prices could be offered for the first 4,000 MW, and the next 3,000 MW could be priced through bidding, he said. He also suggested qualification-based selection to fast-track planning and construction.

    Doan Ngoc Duong, vice chairman of the Institute of Energy (IEVN) agreed, saying many countries have adopted similar policies to incentivize investors in early phases.

    “We need a pioneering project as a pilot for choosing investors and mechanisms.”

    Too many investors

    Nguyen Thanh Huyen of the Vietnam Administration of Seas and Islands said the number of companies seeking to invest in offshore wind farms has skyrocketed.

    “Over the last year and a half 35 firms have asked to explore 41 locations to build wind farms, up from the previous three.”

    Nguyen Manh Cuong of the IEVN said 22 projects have registered in the north and 74 in the south with a total designed capacity of over 156,000 MW.

    This is much higher than the government’s target of 7,000 MW.

    In the northern province of Nam Dinh, for instance, only one project is registered, but with a capacity of 12,000 MW.

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  • EU lifts safety restrictions on Vietnamese noodles

    EU lifts safety restrictions on Vietnamese noodles

    Starting July 3, the EU will remove Vietnam’s rice noodles, glass noodles and vermicelli from the list of goods subjected to safety controls.

    Announcing this, the Ministry of Industry and Trade said Vietnamese exporters will no longer have to provide safety certificates for these products.

    However, some local herbs including coriander, mint and parsley will be subjected to a temporary increase in safety controls at border posts.

    Vietnamese dragon fruit and instant noodles containing spices/seasonings or sauces will also be subjected to special entry conditions in the EU market to check for contamination risks.

    Vietnamese instant noodles have been under the EU scanner since January after some were found containing ethylene oxide, a substance banned in the union.

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  • Vietnam Airlines expects financial difficulties until 2023-end

    Vietnam Airlines expects financial difficulties until 2023-end

    Vietnam Airlines expects financial difficulties to last until the end of 2023, amid aftermath of the Covid-19 pandemic.

    The flag carrier targets to be profitable and turn around its negative equity this year, it said in a filing to the Ho Chi Minh Stock Exchange, on which its stock HVN is still restricted to trading in the afternoon due to loss reports.

    The airline has recorded an accumulated loss of over VND24.5 trillion ($1.05 billion) as of March, and it wants to turn this situation around and become profitable by 2024 onward.

    It had recently sold a 35 percent stake in Cambodia Angkor Air for $35 million and will sell the remaining stake (14 percent) this year.

    It is set to issue more shares to pump up its capital in 2023 or 2024. In September last year, it raised nearly VND8 trillion by share issuance. The airline said it has been benefiting from a strong rebound in domestic travel.

    Last month, it operated nearly 12,000 flights and transported two million passengers, exceeding its plan by 42 percent.

    International travel, however, has been affected by the Russia-Ukraine crisis and rising fuel prices, the airline said.

    The Vietnamese government owns a more than 86 percent stake in Vietnam Airlines through two entities. Japan’s ANA Corporation owns a 5.6 percent stake.

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  • Finance ministry seeks further gasoline tax cut

    Finance ministry seeks further gasoline tax cut

    The Ministry of Finance is set to propose a further environment tax reduction on gasoline amid surging prices.

    It wants to scrap the tax altogether after the National Assembly approved a 50 percent reduction to VND2,000 ($0.086) per liter starting April. The finance ministry on April 21 sought official feedback on a proposal to lower gasoline import prices from 20 percent to 12 percent.

    Although such a reduction won’t bring down gasoline prices, it will help to diversify gasoline import markets and avoid dependence on South Korea and ASEAN, which are offering incentive import taxes.

    These proposals show the effort of the Vietnamese government in containing inflation, which has become a topic of concern this year as prices of key commodities surged globally.

    The World Bank has recently slashed global growth forecast by nearly a third to 2.9 percent for this year due to concern of elevated inflation.

    Vietnam’s Consumer Price Index (CPI), which measures inflation, in the first five months rose 2.25 percent year-on-year, compared to 1.29 percent in the first five months of last year.

    Standard Chartered Bank expects Vietnam’s inflation to be at 4.2 percent this year, slightly higher than the central bank’s cap of 4 percent.

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  • Vietnam ranks 5th globally in NFT users

    Vietnam ranks 5th globally in NFT users

    Vietnam ranks fifth globally in the number of non-fungible token users at over two million as of last year, a study has found.

    The country had 2.19 million users last year, behind Thailand, Brazil, the U.S. and China, according to the Digital Economy Compass 2022 study by Germany-based data portal Statista.

    In terms NFT penetration rate, it also ranked fifth at 2.24 percent, behind Thailand, Canada, Australia and Brazil.

    The penetration rate is the share of active paying customers (or accounts) from the total population last year.

    Another recent survey by Australian data research company Finder revealed Vietnam ranks fifth globally in the ratio of non-fungible token game players.

    Twenty-three percent of respondents in Vietnam said they play NFT games, according to the survey conducted between March and May.

    It was ranked behind India, Hong Kong, the United Arab Emirates and the Philippines.

    Vietnam has made headlines in the non-fungible token world in recent years with Axie Infinity, one of the most popular NFT games globally.

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  • Banana exports to China boom despite Covid restrictions

    Banana exports to China boom despite Covid restrictions

    Banana exports to China increased by 10 percent in the first five months though total vegetable and fruit exports to that country were down 28 percent.

    Vietnam was China’s largest supplier of bananas at 742,000 tons or 43 percent of its total imports, according to the Vietnam Fruit & Vegetables Association (Vinafruit).

    Vo Quang Huy, director of agriculture firm Huy Long An Co. Ltd, said his company’s banana exports to China were up almost 30 percent year-on-year despite the Covid-19 restrictions and safety measures in place there.

    Nguyen Van Cu, director of a northern exporter, agreed, saying his company’s exports doubled to around 500 tons.

    “Prices have surged from VND3,000 (13 U.S. cents) a kilogram last year to VND5,000-8,000.”

    Vinafruit chairman Dang Phuc Nguyen attributed the rise to falling output in China, where banana farms have been plagued by Fusarium wilt, a lethal fungal disease that has no cure, and rising input costs.

    But packaging and logistic costs of up to VND13,000 a kilogram eat up profits, exporters said.

    They expect exports and prices to rise sharply in the second half of this year.

    Vietnamese exports need to improve their quality and origin traceability to increase their chances of entering the Chinese market, Nguyen added.

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  • Delivery work most lucrative among 5 largest job categories

    Delivery work most lucrative among 5 largest job categories

    Delivery workers earn the highest salaries among the five largest groups of workers as companies compete with each other amid a shortage of candidates, a study has found.

    They get an average post-social distancing salary of VND10.1 million ($435.82) a month, 11 percent more than the next group, factory workers (VND9.1 million), according to recruitment platform Viec Lam Tot.

    Their salary also increased the most in March — 11.2 percent — indicating high demand as delivery companies competed to hire drivers.

    Salesclerks had an average salary of VND8.1 million per month this year, followed by security guards (VND7.1 million) and hotel and restaurant staff (VND6.7 million).

    Viec Lam Tot said there is a shortage of delivery staff as e-commerce demand remains high.

    E-commerce had grown by over 20 percent last year, according to the Vietnam E-commerce Association.

    Nguyen Hoang Trung, CEO of delivery app Loship, said people have picked up the habit of ordering things online.

    An average delivery person could make VND400,000-600,000 a day if they work for eight hours, and some work for up to 18 hours, he added.

    The report also said the highest salary for drivers is paid in the southern province of Binh Duong at VND11.72 million, followed by Dong Nai Province (VND11.6 million) and HCMC (VND9.78 million).

    Factory workers, waiters and salesclerks in the two provinces also get higher salaries than their counterparts in HCMC.

    The exodus of over 500,000 workers from HCMC to their hometowns at the end of last year partly explain these figures, the report said, citing data from the General Statistics Office.

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  • E-commerce, online services strip Vietnam of tax revenues

    E-commerce, online services strip Vietnam of tax revenues

    Vietnam is failing to effectively tax e-commerce and online services as it struggles to make tech giants set up abroad fulfill their taxation duties.

    “Taxing e-commerce and digital platforms is a new and difficult challenge. There is huge loss of tax in this area as servers are placed abroad,” Minister of Finance Ho Duc Phoc told the National Assembly on Wednesday.

    E-commerce sellers are based both in Vietnam and other countries, and it is difficult to locate and tax them, he added. Phoc was responding to lawmakers’ concerns about tax avoidance in online business.

    Nguyen Thi Le Thuy, a lawmaker from the southern province of Ben Tre, estimated that around 85 percent of tax from digital giants like Facebook and Google are lost annually.

    Other lawmakers said that the tax that Vietnam has been able to collect from these tech firms recently is not appropriate to their revenues in the country.

    Cross-border platforms like Facebook and Google have paid VND5.1 trillion ($220 million) in taxes for the period between 2018 and 2021, according to the finance ministry.

    Phoc said that his ministry has set up payment portal and explained to e-commerce platforms and tech giants their tax duties, but taxing them remains a difficult task.

    The ministry is considering the best method to tax e-commerce trade, and the long-term goal is to establish an online automatic taxing system.

    Vietnam has over 100 e-commerce platforms, including 41 that sell goods and 98 providing services.

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  • Vietnam urges banks to merge, become more competitive

    Vietnam urges banks to merge, become more competitive

    The Vietnamese government is urging banks to merge and increase their scale toward becoming more competitive. It wants to make Vietnam an ASEAN leader in the banking sector.

    The government wants banks to have a capital adequacy ratio of at least 10-11 percent by 2023, and 11-12 percent by 2025, according to a recent plan to restructure credit organizations and handle bad debts during the 2021-2025 period.

    The capital adequacy ratio is a measure of how much capital a bank has available to handle a certain amount of loss before facing the risks of becoming insolvent.

    The government has said it wants Vietnam’s banking sector to become a top four leader in the ASEAN bloc. It has asked banks to make plans to increase their charter capital and improve their management.

    Big banks should have a minimum charter capital of VND15 trillion by 2025, and small and medium banks, VND5 trillion, it said.

    The government also wants banks to have a bad debt ratio of under 3 percent by 2025.

    Vietnam has 31 domestic commercial banks, with the biggest in terms of charter capital being state-owned lenders BIDV, Vietinbank and Vietcombank, according to the State Bank of Vietnam.

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  • Vietnam to promote electronic bills via lottery

    Vietnam to promote electronic bills via lottery

    Vietnam is set to use lottery prizes to promote the use of electronic bills as the country seeks to boost digital transformation.

    Since April, seven billion electronic bills, or 93 percent of the total, have been recorded, and starting July 1 all businesses in the country will have to utilize electronic billing, Minister of Finance Ho Duc Phoc told the National Assembly on Wednesday.

    To promote electronic bills, the ministry will use lottery service Vietlott to award random people using the electronic billing code submitted to the national database whenever a customer purchases a product or service.

    Promoting electronic bills is among Vietnam’s latest efforts to create an e-government as its leaders have vocalized the need to digitally transform the country to boost economic growth.

    Deputy Head of the General Department of Taxation Dang Ngoc Minh said earlier this month that tax payers can now scan a QR code to have tax bills delivered to their smartphone within 10 seconds.

  • US waives tariffs on Vietnam solar panels

    US waives tariffs on Vietnam solar panels

    Joe Biden has waived tariffs on solar panels exported from Vietnam and three other Southeast Asian countries for two years amid rising demand for renewable energy in the U.S.

    The tariff exemption will also apply to panels from Cambodia, Malaysia and Thailand and serve as a “bridge” while U.S. manufacturing ramps up, the White House stated Monday.

    Solar energy is among the fastest growing sources of new electric generation in the United States, and Southeast Asia made up around three-quarters of solar modules imported to the U.S. in 2020, the White House said.

    Vietnam has risen as a solar power hotspot in recent years thanks to the government’s incentive feed-in tariffs to attract investors.

    In the first four months this year, solar plants accounted for 10.9 percent of total power production, according to state-owned utility Vietnam Electricity.

    Hong Kong-based Jinko Solar, one of the largest solar panel manufacturers in the world, received an investment license for its $498 million project in northern Vietnam last year and launched its plant in January.

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  • Rumors, manipulation plague Vietnam markets

    Rumors, manipulation plague Vietnam markets

    Vietnam’s stock and corporate bond markets are heavily affected by rumors and sophisticated manipulation, which pose the need for more transparent and thorough regulations, a minister has said.

    Many tickers have been pushed up to new peaks without improvement in business results, with many companies failing to submit their earnings in time, Minister of Finance Ho Duc Phoc informed the National Assembly in a recent report.

    “The stock market is still in an early stage of development and is therefore heavily affected by investor sentiment. Rumors, fears of cash flow and inflation pressure have caused the market to plunge recently.”

    Vietnam’s benchmark VN-Index hit this year’s bottom on May 16, the lowest in 11 months. The plunge came after VN-Index increased by nearly 36 percent last year as one of the best performers globally. The number of new stock accounts opened last year alone equaled that of the previous 10 years.

    But the market turned bearish in April and has struggled to recover since.

    Phoc is also concerned about risks faced by a speeding corporate bond market.

    Many amateurs who fail to meet government criteria have cheated to secure bonds, made possible by the violations of commercial banks and stock brokerages, he said.

    One typical example involves property developer Tan Hoang Minh, whose chairman Do Anh Dung was arrested in early April on suspicions of “fraudulent appropriation of assets,” he added.

    Governor of the State Bank of Vietnam Nguyen Thi Hong called for more thorough solutions to prevent future violations.

    In the long run, the government needs to make the corporate bond market a key capital mobilization channel for the economy, she added.

    Phoc said changes will be made to tighten regulations on bond issuances, listed on a dedicated market for corporate bonds.

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  • Rice export prices continue to drop

    Rice export prices continue to drop

    Average rice export prices fell for a second straight month to US$415-420 a ton, resulting in a marginal year-on-year decline in revenues for Vietnam despite higher volumes.

    The country exported 2.86 million tons for $1.39 billion in the year to date, up 10.3 percent in volume but down 1 percent in value, according to data from the Ministry of Agriculture and Rural Development.

    Global prices have been falling due to abundant supply, with Thai 5 percent broken rice becoming $5 per ton cheaper at $445.

    The Philippines remained Vietnam’s top market, importing 915,000 tons for $422.2 million, up 28.3 percent and 11 percent.

    But domestic prices rose slightly in early June as there was a drop in supply between the winter-spring and summer-autumn crops.

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  • Helicopter operator profits up 11 percent

    Helicopter operator profits up 11 percent

    Vietnam Helicopter Corporation’s profits rose by 11 percent to VND263 billion (US$11.3 million) last year despite the severe impact Covid-19 had on the aviation industry.

    It saw a 6.7 percent drop in revenues to VND2.08 trillion.

    The company transports cargo and people, trains pilots, imports aviation devices, and offers firefighting services.

    Owned by the Ministry of National Defense, it has seven affiliates and subsidiaries and a charter capital of VND3.98 trillion.

    It charges $3,650-7,300 for an hour of chartered flying.

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  • Lazada appoints new group CEO

    Lazada appoints new group CEO

    Alibaba’s Southeast Asian e-commerce arm, Lazada, has named James Dong as its new group CEO as the region’s Shopee-dominated competition steps up.

    In his new role, Dong wil oversee Lazada’s expansion plan into Euroupe. The 42-year-old CEO will succeed Chun Li, who will continue serve as adviser to the group’s chairman Jiang Fan and member of Lazada’s board of directors.

    Formerly with McKinsey & Co, Dong was head of globalisation strategy and corporate development role at Alibaba Group before joining Lazada as CEO of Lazada Thailand and Vietnam in 2018.

    He has subsequently handed up the leadership of Vietnam unit to Kaya Qin, who has been chief operating officer of Lazada Vietnam since 2018, while remaining in his role as CEO of Thailand.

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