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Tag: Vietnam

  • Vietnam leads region in power production

    Vietnam leads region in power production

    After adding 3,420 megawatts of power capacity last year, Vietnam now leads Southeast Asia with 76,620 MW.

    It represented a 9.8 percent increase in capacity, CEO of national utility Vietnam Electricity (EVN), Tran Dinh Nhan, said at a forum Friday.

    He however expressed concern that 27 percent of it is from renewable sources and this high ratio is causing difficulties in managing distribution.

    There were times last year when 60 percent of power generation were from renewable energy, but due to plunging demand because social distancing curbs to contain Covid-19, this led to an oversupply of power, he said.

    But EVN has forecast that in June, when temperatures peak, the north could see power shortages while the central and the southern regions might have oversupply.

    It expects power consumption to rise by 7.6 percent this year to 242.4 billion kilowatt-hours.

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  • Auto sales down 3 pct in 2021

    Auto sales in Vietnam last year dropped 3 percent from 2020 to 383,444 units as the fourth Covid-19 wave forced dealers to shut down.

    The sales figure is a combination of data from the Vietnam Automobile Manufacturers Association (VAMA), TC Motor, and VinFast.

    VAMA, which includes Truong Hai Auto Corporation (Thaco), Toyota, and Honda, saw 277,203 units sold, down 2 percent from the previous year.

    TC Motor, which distributes Hyundai cars, saw sales declining 13.3 percent to 70,518 units.

    VinFast posted a growth of 21.2 percent to 35,723 units.

    In the third quarter last year, most auto units in the south were shut down as the Delta variant spread.

    But a 50 percent reduction in the registration fee, which came into effect in December and will last until the end of May this year, pushed up sales.

    VAMA members sold 43,526 units in December alone, the highest last year. December was the fourth month in a row that auto sales rose.

    Most media representatives of auto brands in Vietnam expect a recovery in sales this year as the Covid-19 pandemic seems to be under control.

  • Vietnam set to become Asia startup hub

    Vietnam set to become Asia startup hub

    Vietnam could be Asia’s next startup hub after local companies saw a funding surge over 40 times in the last five years, a venture capitalist said.

    Venture funding for startups in Vietnam reached $2.1 billion last year, up from just $48 million in 2017, Binh Tran, co-founder of Ascend Vietnam Ventures said.

    The sector is now attracting top-tier Silicon Valley venture capitalists, including Goodwater Capital LLC, Accel Partners LP and Altos Ventures Management Inc, he added.

    “Vietnam saw a tremendous amount of maturity and growth early on, which will help it become a very important hub for the region,” he said.

    The country is forecast to have the second-largest digital economy in Southeast Asia by 2030, according to a report by Google, Temasek Holdings Pte and Bain & Co.

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  • Vietnam cut excise duty on battery electric car

    Vietnam cut excise duty on battery electric car

    The National Assembly Tuesday voted to cut excise on battery-run electric cars to 3 percent for a period of five years.

    With effect from March 1, the tax on various types of battery electric vehicles (BEVs) will be reduced by 3-12 percentage points from current levels and be valid until Feb. 28, 2027.

    In 2027, they will revert to current levels of 5-15 percent.

    The National Assembly’s Standing Committee said the introduction of incentives to attract investors earlier than other Southeast Asian countries would create great opportunities for Vietnamese companies to produce BEVs for both domestic and foreign markets.

    A number of companies are preparing to begin the production of BEVs.

    “Electric cars are both environment-friendly and suitable for practical use,” Vu Hong Thanh, chairman of the House Economic Committee, said.

    Automaker VinFast has tied up with a Chinese company to research and manufacture electric car batteries as part of its vision to become a global brand.

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  • Vietnam operating costs among Asia’s lowest

    Vietnam operating costs among Asia’s lowest

    Vietnam has the second-lowest operating costs among nine countries in Asia and is assessed to have high logistics development potential, a report says.

    The monthly minimum operating cost for a manufacturing company in Vietnam is $79,280, compared to leader Singapore at $366,561 and second-placed Thailand at $142,344, according to a report by Singapore-based business transformation consultancy TMX.

    The report says the minimum operating cost in Vietnam is only higher than Cambodia’s at $65,313. The report calculated the average costs of doing business in nine popular potential manufacturing locations in Asia: Cambodia, India, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

    Vietnam, along with several other countries like Thailand and the Philippines, offers a sizable and relatively affordable pool of labor.

    While Vietnam offers abundant employment opportunities, it has fewer highly skilled talent in many sectors with talent competitiveness of around 35 points, compared to the 40 points for the Philippines and Thailand.

    Warehouse rentals in Vietnam is the same as others at eight other countries, the report said.

    The report also said that Vietnam was the only country in the “high potential” group in terms of logistics costs.

    In the overall country competitiveness scorecard, it ranks fifth behind Singapore, Malaysia, India, and Thailand.

    “Vietnam has a better score in a business environment. However, with a lower talent score, it indicates challenges for companies looking to find ready talent. Such businesses may consider investing in training and development,” the report said.

  • Transport ministry wants several airports to be privatized

    Transport ministry wants several airports to be privatized

    The Ministry of Transport wants private investors to build and operate proposed airports such as Sa Pa in the north and Quang Tri in the central region.

    It wants two others built under public-private partnerships in Lai Chau and Cao Bang in the north.

    It also said local authorities should take over the management of runways in 13 airports.

    Four central airports that have military components, Tho Xuan in Thanh Hoa Province, Chu Lai in Quang Nam Province, Phu Cat in Binh Dinh Province, and Tuy Hoa in Phu Yen Province, can also involve private investors if the Ministry of Defense transfers runway management to local authorities.

    Many companies have expressed interest in building and upgrading airports.

    Vietjet has been eyeing Chu Lai in central Quang Nam Province, Cat Bi Airport in Hai Phong City, Tuy Hoa, and Dien Bien in the namesake northwestern province.

    IPP Group wants to invest in Phu Quoc and Tuy Hoa, Vingroup in Chu Lai and FLC in Dong Hoi Airport.

    Vietnam began building and upgrading airports before the Covid pandemic hit since tourism was growing rapidly.

    By 2025, the government plans to have the first phase of Long Thanh International Airport operational with a capacity of 25 million passengers a year.

    Tan Son Nhat in HCMC and Noi Bai in Hanoi are set to be expanded to handle 50 million and 60 million passengers by 2030.

    The country needs VND403.1 trillion ($17.75 billion) to build and expand airports by 2030.

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  • Vietnam buys 80 pct of Cambodia’s agriculture exports

    Vietnam buys 80 pct of Cambodia’s agriculture exports

    Vietnam bought nearly 80 percent of Cambodia’s nearly $5 billion worth of agriculture exports last year. It bought 96-99 percent of Cambodia’s cashew, pepper and mung bean exports, according to a report by Cambodia’s Ministry of Agriculture, Forestry and Fisheries.

    Exports of Cambodia cashew to Vietnam grew 4.6 times from 2020, and that of pepper and mung bean surged four times. Other produce that Vietnam bought in large amounts from its neighbor were rice, grapefruit, bananas, and mangoes. Cambodian Agriculture Minister Veng Sakhom told Vietnam’s President Nguyen Xuan Phuc during the latter’s recent visit that Vietnam was Cambodia’s biggest importer among 70 countries and territories last year.

    Vietnamese companies had also harvested $200 million worth of latex in the first 11 months last year, he added.

    “Rubber farming has created jobs for around 33,000 locals. Vietnamese companies also contributed to over 50 percent of Cambodia’s banana exports, creating jobs for around 14,000 workers.”

    Insiders say the surge in Cambodia’s exports of agricultural produce to Vietnam came as many Vietnamese companies have invested in Cambodian farming.

    Agriculture expert Vo Tong Xuan ascribed the trend to Vietnamese businesses and individuals taking advantage of Cambodia’s affordable land fund as well as lower labor costs.

    “The yield is then exported back to Vietnam.”

    In the first 11 months last year, trade value between Vietnam and Cambodia rose 84 percent year-on-year to $8.6 billion, according to Vietnam Customs. Cambodia’s exports to Vietnam rose 337 percent in the period.

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  • Vietnam car maker VinFast to build US battery factory as it goes all-electric

    Vietnam car maker VinFast to build US battery factory as it goes all-electric

    Vietnam’s VinFast plans to build electric vehicle battery cells and packs in a new U.S. manufacturing complex, its global chief executive told Reuters, as the company pledged to transform itself into an all-electric automaker by the end of this year.

    VinFast, part of Vingroup JSC, the largest conglomerate in the country, became the country’s first full-fledged domestic car maker when gasoline-powered models built under its own badge hit the streets in 2019.

    The company, which began selling electric vehicles (EVs) in Vietnam at the end of 2021, said in a statement on Thursday it planned to become what it said would be the first car company to cease making gasoline-powered cars and transition to all-electric vehicle production from late 2022.

    VinFast is betting big on the U.S. market, where it hopes its electric SUVs and a battery leasing model will be enough to tempt consumers away from the likes of Tesla and General Motors.

    “We will build our gigafactory in the U.S. as well,” Le Thi Thu Thuy, Vingroup vice chair and VinFast Global CEO said, referring to the new battery facility in an interview during her U.S. visit to attend the Consumer Electronics Show in Las Vegas.

    The company will continue to source batteries from its suppliers, she added. Thuy said VinFast will initially assemble battery packs with cells sourced from its supplier at its U.S. complex before starting its own production there.

    “We have narrowed down from I think, over 50 sites to about three sites,” she said.

    She will visit some sites during her trip before making a decision this year, adding that the “mega site” would also include an electric bus factory.

    In December, Vingroup said it had started building a battery cell plant in Vietnam. The company is looking to initially produce 100,000 battery packs per year, with $174 million in investment, and then upgrade capacity to one million.

    VinFast previously said it had plans to start producing electric cars in the U.S. in the late 2024. The company said that on Thursday it was seeking to establish an EV plant in Germany.

    “The era of shipping cars around the world is over, especially since Covid-19. You must have the factory close to the market in order to win over your customers,” VinFast said in a statement.

    VinFast said prices for its VF8 sport utility vehicle (SUV) started from $41,000 in the United States, and that it would apply blockchain technology to record orders and confirm ownership. By comparison, a Tesla SUV sells for around $50,000. Vingroup said it was targeting global electric vehicle sales of 42,000 in 2022. Shares of Vingroup rose as much as 5.8 percent on Thursday after it revealed VinFast’s EVs line-up and the plans to go all-el

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  • 300,000 tonnes of dragon fruit have no buyers

    300,000 tonnes of dragon fruit have no buyers

    Around 300,000 tonnes of dragon fruit will soon be ripe for harvest but without buyers, as China clamps down on border trade, industry insiders said. With the northern provinces of Quang Ninh and Lang Son having both restricted trade at the border with China due to containers pilling up, many Chinese buyers have stopped purchasing Vietnamese dragon fruit, Phan Van Tan, deputy director of Binh Thuan’s Department of Agriculture and Rural Development, told a forum Thursday.

    Dragon fruit prices have dropped in the last few weeks as China tightened its Covid-19 measures that caused thousands of container trucks to get stuck at the border.

    Some exporters said they have tried to transport goods via sea but this is not a sustainable solution as shipping fees have surged three times from before.

    China has been the biggest buyer of Vietnamese agricultural produce and dragon fruit for years. Dragon fruit exports to China exceed that of 50 other markets, said Nguyen Khac Huy, CEO of Hoang Phat Fruit in Long An Province.

    China’s proximity to Vietnam explains why exporters prefer to send their fruit there over other destinations like Europe, which could take up to 42 days. Vietnam produces around 1.4 million tonnes of dragon fruit every year. Eighty percent comes from the three provinces of Binh Thuan, Long An, and Tien Giang.

    Deputy Minister of Industry and Trade Tran Thanh Nam suggested supermarkets nationwide buy the fruit to support farmers.

    The ministry will also hold a forum with trade offices in Europe to diversify output, he added.

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  • Thousands strike work after Nike supplier cuts Tet bonus

    Thousands strike work after Nike supplier cuts Tet bonus

    Thousands of workers of Taiwanese-invested footwear maker Pouchen Vietnam, a Nike contract manufacturer, struck work Friday, demanding the same Tet bonus as last year.

    They refused to return to work after finishing their lunch to protest the company’s policy to pay less bonus than last year for the coming Tet (Lunar New Year) festival. Tet, the most important Vietnamese festival, falls in early February this year. The workers stood on national road 1K in front of their factory’s entrance, causing traffic congestion for hours. The strike affected others and all 14,000 workers of the factory in Bien Hoa Town, southern Dong Nai Province, stopped working.

    A mobile police team was dispatched to maintain order in the area. A female worker said that the company had announced Thursday that employees who have worked for it a full year or more will be given Tet bonuses of 1-1.54 months’ salary – around VND5 million ($217) to nearly VND20 million.

    The highest bonus in 2021 was 1.87 months’ salary, and in previous years, 2.2 months. “With this (coefficient), workers’ Tet bonus in 2022 will be lower than before,” she added.

    A Pouchen representative said that in 2021, the company had faced difficulties in production and business. When the fourth wave of Covid-19 broke out, the factory had to stop working from July 12 to Sept. 30, 2021. On Oct. 5, 2021, it resumed production, but at 60 percent capacity.

    Due to the failure to fulfill the production plan, profits fell, so the Tet bonus, the biggest and most anticipated reward for workers, could not be the same as the previous year. The rep also said that under the collective labor agreement, the company would pay Tet bonus to employees based on its business performance.

    Nguyen Thi Nhu Y, head of the Dong Nai Provincial Labor Confederation, said the union was coordinating with authorities to resolve the situation. She noted that Pouchen’s Tet bonus was higher than the local industry average.Nguyen Huu Nguyen, Chairman of the People’s Committee of Bien Hoa, said relevant agencies are trying to negotiate with the board of directors of Pouchen to increase the Tet bonus. “However, employees need to share the company’s difficulties, because Covid-19 has caused businesses to suspend operations for months,” he said.

    Pouchen Vietnam, part of Taiwan’s Pouchen Group, has one more factory in Dong Nai and six others in HCMC and the three southern provinces of Tien Giang, Tay Ninh and Ba Ria – Vung Tau for a total of 130,000 employees. The group is expected to spend more than VND1.2 trillion on Tet bonuses this year.

  • $4 Starbucks coffee has become a daily staple

    $4 Starbucks coffee has become a daily staple

    While the franchise’s 2021 financial results took a hit because of the Covid-19 pandemic, a tangible gain has been the Starbucks VND90,000 ($4)coffee becoming a daily staple in Vietnam.

    Starbucks Vietnam general manager Patricia Marques said that despite the impacts of the nine-week social distancing orders in 2021, the global coffee brand has built up a regular customer base for its coffee worth VND90,000-100,000.

    She said it has also established more outlets away from the downtown in new urban areas, buildings, and local communities. While people used to prefer living close to the center of a locality, they are willing to live a little further away these days, she said.

    Starbucks Vietnam closed three outlets but opened nine new ones in 2021. Between December 2021 and January 2022, it opened another six: three in Hanoi; two in HCMC; and one in the southern province of Binh Duong.

    In Vietnam, Starbucks currently has 77 outlets whose takeaway sales have grown amid Covid-19 outbreaks.

    Marques said she expected instability to continue in Vietnam’s food and beverage market this year, but takeaway revenue, non-cash payment, and e-commerce would continue to grow.

    While there is still a lot of vacant space, it will not be easy for food and beverage businesses to find satisfactory locations at a reasonable price, she said. Citing data from a partner, she said the rent of commercial premises in Vietnam increased by 3 percent, while it decreased 10 percent in Singapore, Hong Kong, Thailand, Cambodia, and Laos.

    According to the brands’ official websites, chains with the highest number of outlets in Vietnam are the domestic brands Highlands (462 stores), The Coffee House (146), and Trung Nguyen (89).

    U.S.-based Starbucks made consolidated revenues of $29.1 billion in the fiscal year 2021 (ending in the third quarter of 2021), up 24 percent against over 2020.

    In the fiscal year 2022, the brand expects global earnings of $32.5-33 billion, beating Wall Street’s estimate of $32.07 billion, and plans to open about 2,000 new outlets globally, three-quarters of them outside the U.S. According to data recorded by Statista, as of November 2021, Starbucks had 33,833 outlets worldwide.

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  • Gojek drives car service into Hanoi

    Gojek drives car service into Hanoi

    Ride-haling platform Gojek has launched its GoCar Protect service in Hanoi a month after introducing it in HCMC.

    The Indonesia-headquartered company guarantees that all its drivers have got two doses of Covid-19 vaccines and all cars are equipped with an air purifier and a transparent protective shield to separate drivers and passengers.

    Drivers must take a selfie to prove they have a mask on at the start of the day.

    Gojek Vietnam general manager Duc Phung called the launch in HCMC a success after seeing a “multifold increase” in the number of bookings.

    “The risk of infection continues to be our users’ top concern when considering mobility options,” and that this is why the company continues to adopt stringent safety practices, he said.

    The launch adds a third car ride-hailing option in Hanoi after GrabCar and beCar.

    Gojek, which entered Vietnam in 2018, introduced its car services much later than its competitors, who have been at it for years.

    Ride-hailing and food delivery revenues rose by 35 percent in 2021 to $2.4 billion, according to a report by Google, Temasek and Bain & Company.

  • Food establishments learn to be agile amid pandemic

    Food establishments learn to be agile amid pandemic

    Hit hard by the Covid-19 pandemic, the food and beverage industry has nevertheless learned valuable lessons in flexibility and labor retention.

    Accommodation and food establishments saw revenues decline by 19 percent in 2021 to VND398 trillion ($17.3 billion), according to data from the General Statistics Office.

    The southern province of Ba Ria – Vung Tau reported the steepest decline of over 50 percent, followed by HCMC at more than 46 percent. In Binh Duong and Dong Nai provinces and Hai Phong, Hanoi, and Da Nang cities, the decline was 14-23 percent.

    According to the ranking company Vietnam Report, over 90 percent of businesses in the F&B industry was seriously affected by the pandemic in 2021, especially in terms of logistics, distribution, and labor safety.

    Some 35 percent also faced challenges related to rentals and labor availability.

    A spokesperson for the Dau Homemade restaurant chain said a widespread difficulty the industry faced amid the pandemic was a labor shortage. To retain workers, his chain arranged working shifts more appropriately and did not cut salaries, he said.

    During nearly half a year of stay-at-work, Dau Homemade and Gong Cha milk tea chains covered their workers’ basic daily expenses and regular Covid testing fees.

    A spokesperson for Dai Moc Food, which supplies food to factories and hospitals, said besides taking care of employees, it is also necessary to take care of their loved ones so that they are at ease while working.

    Dai Moc provided fresh food to employees’ families, visited them, and paid salaries in advance if workers asked for them, he said.

    Dau Homemade switched from the restaurant business to foodstuff production and vegetable sales.

    Besides ensuring product quality, Gong Cha has focused on training employees how to deal with Covid-related situations such

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  • Vietnam retail sales down in 2021

    Vietnam retail sales down in 2021

    Data of the General Statistics Office (GSO) of Vietnam showed that the country’s total retail sales of consumer goods and services from January to October reached VND3,720 trillion (US$162.4 billion), down 8.6% compared with the same period last year.

    Food and foodstuffs were the only sector whose retail sales rose, with a year-on-year increase of 4.4%.

    All other sectors suffered a decline in retail sales. Retail sales of vehicles; tools, equipment, home appliances, educational and cultural products; and clothes edged down 6.7%, 11.1% and 11.7% year-on-year, respectively.

    HCMC, which always leads the country in retail sales, saw a year-on-year decline of 26.2% from January to October 2021. Retail sales of other big cities and provinces such as Can Tho, Hanoi and Khanh Hoa fell 4.8%, 4.4% and 18.6% against the same period last year, respectively.

    Some localities enjoyed a slight increase in retail sales, including Danang (up 0.9% year-on-year), Dong Nai (up 3.7%), Binh Duong (up 6.4%) and Haiphong (up 8.7%).

    Accommodation and catering services were the hardest hit sectors. From January to October, accommodation and catering revenues plunged 38.8% year-on-year in HCMC, 35.9% in Nghe An, 25% in Binh Duong, 22.8% in Dong Nai, 19.5% in Hanoi, 17.3% in Danang, 12.7% in Quang Ninh, 11.1% in Can Tho and 6.4% in Haiphong.

    Travel revenues also dropped sharply in January-October, down 67.5% year-on-year in Thua Thien-Hue, 58% in HCMC, 53.4% in Danang, 49.9% in Haiphong, 45.7% in Hanoi, 41.5% in Quang Binh, 34.2% in Ba Ria-Vung Tau and 30.6% in Quang Ninh.

    Travel restrictions aimed at slowing the spread of Covid-19 and lost incomes have negatively affected the retail market.

    According to the General Statistics Office, the retail market always posted double-digit growth from 2016 to 2020.

    The country’s retail sales were US$118 billion in 2016 (up 10.2% year-on-year), US$129.56 billion in 2017 (up 10.9%), US$142.8 billion in 2018 (up 12.4%), and US$161.7 billion in 2019 (up 12.7%).

    In 2020, despite the negative impact of the Covid-19 pandemic, total retail sales of consumer goods and services amounted to US$172 billion, up over US$11 billion from 2019.

    As the Covid-19 pandemic has been brought under control, many services have been allowed to reopen since early last month. The country’s total retail sales of consumer goods and services in October rose 18.1% month-on-month.

    The General Statistics Office expected the resumption of economic activity and increasing demand in the year-end season would help the retail sector recover strongly.

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  • Vietnam stock market 7th biggest gainer globally

    Vietnam stock market 7th biggest gainer globally

    Vietnam’s stock market was the seventh biggest gainer last year at 35.7 percent, outperforming regional peers, as new retail investors rushed to a new asset for profit.

    With the benchmark VN-Index rising 394 points to close the year at 1,498 points, Vietnam listed among the top 10 gaining stock markets in the world with Abu Dhabi, Argentina, and Iceland in the top 3.

    In Asia, Vietnam outperformed major markets like Taiwan (24 percent), Thailand (14 percent), and Indonesia (10 percent).

    Some markets like Malaysia and Hong Kong posted a decline.

    2021 was the third year in a row the VN-Index went up. Growth was 7.6 percent and 14.7 percent in the previous years.

    Growth exceeded forecasts of several brokerages at around 1,300 or 1,400 points.

    Several analysts said with a price-to-earnings ratio of 17.47, the Vietnam market is still “cheaper” than others in the region.

    The main bourse, Ho Chi Minh Stock Exchange (HoSE), closed the year with a market cap of VND5,830 trillion ($256.21 billion).

    Brokerage VNDirect has forecast the VN-Index could reach 1,700 points this year.