Việt Nam to issue more specific criteria in special investment incentives
The Ministry of Planning and Investment (MPI) has announced plans to issue more specific criteria for special investment incentives to better attract foreign direct investment (FDI).
The ministry is collecting opinions to finalise the draft of the Prime Minister’s decision on special investment incentives, said Deputy Minister of Planning and Investment Nguyễn Thị Bích Ngọc.
Việt Nam needs more specific regulations on special investment incentives, especially for sectors seeking investment under Việt Nam’s development plans, create more advantages when negotiating with foreign investors and competing to attract foreign investment, she said.
The decision also aims to institutionalise the provisions of the Investment Law and Government Decree No 31/2021/NĐ-CP on issuing detailed regulations and guiding the implementation of a number of articles of the Investment Law.
Many experts have said Việt Nam really needs to have new criteria of special investment incentives, aiming at efficiency in investment activities, attracting quality investment and investment in technology, and also ensuring environmental protection.
At the same time, priority should be given to projects with advanced technology, high-tech, added value and connection to the global production and supply chains. That is a goal of Politburo Resolution No 50-NQ/TW on perfecting institutions and policies for FDI attraction and improving the quality and efficiency of foreign investment co-operation.
In addition, the regulations of this decision must be clear and detailed in terms of the scale and duration of incentives, experts have said.
The special investment incentives need to apply to both new projects and projects with new investment.
Besides special investment incentives and assistance, under Decree 31, projects can now join investment incentives specified in the investment license, business license, certificate of investment incentives, investment certificate or investment registration certificate.
They can also receive incentives via a decision on investment guidelines or a decision on approval for investment guidelines.
The disbursement of FDI capital from early this year to May 20 was estimated at US$7.15 billion, up 6.7 per cent over the same period in 2020, according to the MPI.
During the five-month period, total newly registered and supplemented FDI capital was posted at nearly $14 billion, up 0.8 per cent from the corresponding period last year, including $8.83 billion, up 18.6 per cent, from 613 newly-registered projects.
The manufacturing sector lured the most FDI capital with $6.14 billion in the first five months.
Foreign investors poured capital into 56 provinces and cities across the country, with the largest amount sent to Long An Province with total registered capital of $3.35 billion, accounting for 23.9 per cent of total registered capital in the period. HCM City was the runner-up with $1.34 billion and Cần Thơ came third with $1.32 billion in FDI capital.
Singapore was the largest foreign investor in Việt Nam during the first five months with a total investment capital of $5.26 billion, accounting for 37.6 per cent of total foreign investment capital. It was followed by Japan, South Korea and China.
FROM THE BEGINNING OF THIS YEAR
Sweden exports to Vietnam
Sweden imports from Vietnam
Denmark exports to Vietnam
Denmark imports from Vietnam
Norway exports to Vietnam
Norway imports from Vietnam
Fertilizer exports reach record high
Việt Nam exported nearly 616,000 tonnes of fertiliser for US$213 million from the beginning of the year to mid-June, up 49 per cent in volume and 1.76 times in value from the same period last year.
Statistics from the General Department of Customs showed this was the first time the country saw fertiliser exports hit this record high in both quality and quantity after more than eight years of shipping fertiliser to overseas markets.
During the period, Cambodia, Malaysia and Laos were the top importers while the Philippines and Mozambique markets emerged as promising markets for Vietnamese fertiliser, the department noted.
Trade experts attributed the period’s positive export performance to the fact that from the end of 2020 some fertiliser manufacturers signed contracts for delivery in the first quarter of 2021, to reduce their inventories and balance domestic supply and demand.
Previously, 2021 was forecast to be a difficult year for the fertiliser market with a high inventory of goods, and the possibility of natural disasters, such as drought in the southwestern, southeastern and Central Highlands regions, as well as floods in the northern region.
Việt Nam is home to four fertiliser factories, namely Phú Mỹ, Cà Mau, Ninh Bình and Hà Bắc, producing about 2.5 million tonnes of urea per year. These factories sell only 1.8 million tonnes of urea per year, resulting in more than 500,000 tonnes of urea being stockpiled annually, so they have to find ways to export the excess urea.
Nhân Dân (The People) newspaper quoted Nguyễn Thị Hiền, Deputy General Director of PetroVietnam Cà Mau Fertiliser JSC (PVCFC), as saying that as the fertiliser oversupply situation in the country led to high inventories, PVCFC has made efforts to seek export outlets such as the Philippines, Cambodia and some African nations.
Thanks to close geographic location and low logistics costs, Cambodia was the leading market of PVCFC, consuming between 80,000 and 130,000 tonnes of fertiliser each year, Hiền said.
Vietnam to develop eco-friendly construction materials
Associate Professor Dr. Lê Trung Thành, head of the Vietnam Institute for Building Materials under the Ministry of Construction discusses the development of Việt Nam’s eco-friendly construction materials and solutions to help the sector become sustainable in the future.
Ten years after the Prime Minister’s Decree 567/ QĐ-TTg on the development of Việt Nam’s eco-friendly construction materials until 2020, what has the sector achieved?
The sector has made significant progress. Firms have invested in modern technology and machinery to produce a wide variety of products. By the end of 2019, there were over 2,000 adobe brick factories in the country with a total annual output of 12.6 billion units, which accounted for over 30 per cent market share, a largely improved position compared with just eight per cent in 2010.
Also, there were over 1,400 concrete brick factories with a total output of 9.4 billion units annually, most of them employed modern technology and production methods, which help produce high-quality products.
Advanced construction materials, including autoclaved aerated concrete (AAC), are being produced by domestic firms such as Viglacera and Tân Kỷ Nguyên with a total output of 800,000 m3 annually. Relatively new products such as acotec partition panels are being produced within the country at an annual output of 3.2-4.5 million m3 with VinGroup leading the field with eight production lines.
Not unlike other sectors, construction materials have also been hit hard by the pandemic. By the end of last year, a large number of firms, mostly small-to-medium in size, were forced to close due to plummeting demand. Our most recent report showed just over 1,600 firms remained operational with many having to cut back on production to stay afloat.
What can be done to support the remaining firms?
We must introduce more support policies including tax cuts for eco-friendly firms. At the same time, heavier tax burdens must be put on traditional production methods to encourage firms to move away from them and help level the playing field as it’s typically more expensive for firms to implement new technology and machinery.
Governmental agencies must step up on quality control for construction materials. Severe penalties should be handed out to violators. For this to be a viable path, officials must seek to improve their knowledge on quality indexes for different materials. We strongly advise officials to attend regular training on such topics as the sector is changing rapidly.
There has been a growing trend toward using more eco-friendly materials in construction globally. Are Vietnamese firms ready to adapt to this?
We expect to see major changes taking place within the sector in the near future. Eco-friendly materials and energy saving are the name of the game and this is in line with society’s approach to balance socio-economic development and the preservation of natural habitats.
Construction materials can no longer be just extracted from nature entirely. Greater efforts in reducing the burden on natural resources and recycling used materials, as well as everyday waste, have been seen taking place all over the world.
Vietnam Green Label, a governmental ecolabeling scheme established by the Ministry of Natural Resources and Environment in 2009, has set up 17 standard indexes. Two of which were dedicated to rating the level of eco-friendliness for paint and ceramic construction materials. Two additional indexes for concrete and bathroom ceramics have also been introduced by the Ministry of Construction.
We hope this will put pressure on firms to seek out new and more eco-friendly technology and production methods, which help us preserve natural resources and reduce energy consumption.
Vietnam fruit, vegetable exports to top record $4b in 2021
Exports of fruits and vegetables were worth US$2.06 billion in the first six months of this year, up 17.4 per cent year-on-year, and are expected to reach a record $4 billion this year.
Đặng Phúc Nguyên, general secretary of the Việt Nam Vegetables Association, said exports would increase sharply this year since importing countries are recovering economically, leading to an increase in demand.
But in the next few months Thailand, Malaysia, China, and other countries would also have their fruit harvest season making competition very fierce, he said.
New-generation free trade agreements such as the EU-Việt Nam Free Trade Agreement (EVFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Regional Comprehensive Economic Partnership (RCEP) are helping Vietnamese businesses increase fruit and vegetable exports this year, he said.
The UK – Việt Nam Free Trade Agreement (UKFTA) that took effect late last year scrapped taxes on more than 94 per cent of vegetables and fruits, he said.
Experts said to take advantage of opportunities and boost exports, exporters should improve processing technologies, especially in the post-harvest and packaging stages, to preserve their products longer and enhance their value.
Việt Nam is gradually expanding exports to the US, EU, Japan, and South Korea, but China remains the leading market for Việt Nam’s farming, forestry and seafood products.
It accounted for 64.7 per cent of Việt Nam’s fruit and vegetable exports in the first quarter of this year.
The Ministry of Agriculture and Rural Development has urged the Ministry of Health to issue safety certificates for drivers transporting agricultural products and pay attention to deploying a priority mechanism for COVID-19 vaccination, and the Ministry of Foreign Affairs asked to consider negotiate with bordering countries on the form of “vaccine passport” for drivers transporting goods across the border.
Việt Nam hopes that when COVID-19 is brought under control, Chinese experts can come to re-evaluate the technical processes for its durian.
If it gets approval for official export to China, Việt Nam could become a competitor to Thailand and Malaysia.
Seafood companies expect higher revenue on brighter prospects
Large seafood enterprises have set higher revenue and profit targets this year thanks to positive growth prospects of the seafood export market, especially the US and EU.
According to the Việt Nam Association of Seafood Exporters and Producers (VASEP), seafood exports have rebounded with the figure for the first five months of 2021 reaching US$3.27 billion, up 14 per cent over the same period last year.
Shrimp exports in May totalled $375 million, up 25 per cent year-on-year, while that in the first five months reached $1.34 billion, up 14 per cent. Similarly, pangasius brought in $134 million in May, up 26 per cent and that for five months reached $623 million, up 12 per cent. Other seafood products such as tuna, squid and octopus also witnessed growth.
Vietnamese seafood has the opportunity to increase its market share in the US market as India is heavily affected by the COVID-19 pandemic and Chinese enterprises reduce exports due to the US-China trade war.
Vietnamese shrimp is currently in the most consumed among Việt Nam’s seafood export products to US market, accounting for 21 per cent of seafood exports. The US opened 50 states from May 20 after a long lockdown due to COVID-19, which was a factor promoting imports.
Pangasius exports to the US are also on the rise in the first five months of 2021, reaching $135 million, an increase of 57 per cent compared to the same period last year.
As for tuna, the US is now the largest import markets of Việt Nam’s tuna, accounting for 42 per cent of the proportion.
Besides the US market, businesses expect the EU to be the growth engine this year as the demand for shrimp and seafood products increases in the context of the COVID-19 pandemic being gradually controlled.
EU importers are now more interested in Vietnamese seafood suppliers thanks to tariff cuts from the EU-Vietnam Free Trade Agreement and stable source of raw materials.
By the end of May 2021, Việt Nam’s seafood exports to the EU reached $380 million, up 15 per cent, in which shrimp accounted for nearly $199 million, an increase of 22 per cent over the same period last year.
Minh Phú Seafood Joint Stock Company (MPC), Việt Nam’s biggest shrimp company, targets revenue and post-tax profit of VNĐ15.77 trillion (US$683.4 million) and VNĐ1.1 trillion this year, up 10 per cent and 62 per cent, respectively compared to last year.
Lê Văn Quang, Chairman of MPC’s Board of Directors, said that in 2021, the company will maintain export markets of the US, the EU, Japan and expand to new markets, developing a high-tech industrial shrimp farming complex. MPC’s goal by 2045 is to capture 25 per cent of the world shrimp market.
Nam Việt Seafood Joint Stock Company (ANV) plans to earn VNĐ4.5 trillion in revenue and VNĐ360 billion in profit after tax this year, up 30.8 per cent and 80 per cent, respectively compared to 2020. The company will boost exports to China, the EU, the US and Russia.
Vĩnh Hoàn Joint Stock Company (VHC) targets to achieve revenue of VNĐ8.6 trillion this year, up 22 per cent, but the profit target is forecast at VNĐ700 billion, down 3 per cent compared to 2020. The company’s total revenue in the first four months of 2021 increased by 61 per cent over the same period last year.
VHC’s pangasius products increased by 54 per cent. The company’s export value grew in most markets, China by 246 per cent, the US 130 per cent, Europe 3 per cent, other regions 12 per cent.
This year, VHC plans to invest VNĐ1.3 trillion, of which VNĐ700 billion will be to build an animal feed factory, a hatchery and a new farming area, VNĐ200 billion to renovate factories and VNĐ400 billion for other investments.
According to MPC, in the first quarter of 2021, due to the impact of the COVID-19 pandemic, the prices of some raw materials, inputs and essential services for production and business all increased, especially cargo ship fees rising over 30 per cent over the same period in 2020, affecting the company’s profit, down 56 per cent.
The first quarter has not yet entered the shrimp harvest season, thus the supply is scarce, causing the price of raw shrimp to increase, leading to the rise of costs.
At VHC, increased costs caused the profit in the first quarter of 2021 to decrease by more than 13 per cent compared to the same period last year, to VNĐ131 billion. Selling expenses rose mainly due to increased freight costs.
ACB Securities Company said that the inventory of raw pangasius in Việt Nam is decreasing, while the demand for fish in the world recovers, so the price of raw pangasius may increase.
According to CSI Securities, seafood exporters are still facing challenges from high sea transportation costs due to a shortage of containers, which hinders exports to the US and EU. Meanwhile, some markets have adopted non-tariff barriers to limit and tighten controls on imported goods.