Navico

Apr 13, 2023

Policies needed to boost production linkage, localisation rate Just over 300 Vietnamese enterprises have been able to participate in the supply chains of these multinational corporations. — Photo nhandan.vn Policies are needed to boost the number of domestic enterprises participating in the supply chain of multinational companies, and a boost is necessary for the localisation rates of the processing and manufacturing industry, which now remain modest, insiders said. According to data from the Ministry of Industry and Trade (MoIT), local industry led in attracting foreign investment last year, with a combined registered capital exceeding US$14.96 billion and accounting for 59.5 per cent of Viet Nam’s total FDI. So far, 107 countries and territories have invested in the industrial sector. Deputy head of the MoIT’s Vietnam Trade Promotion Agency Le Hoang Tai called processing and manufacturing a magnet to foreign investors, including multinational conglomerates such as Samsung, Toyota, Honda, and LG. The sector’s key units, such as telecommunications, electronics-IT, steel and cement production, and garment-textiles, were the most attractive, he noted. However, just over 300 Vietnamese enterprises had been able to participate in the supply chains of these multinational corporations. Deputy Chairwoman and Secretary General of the Vietnam Association of Supporting Industries (VASI) Truong Thi Chi Binh said connecting with multinational companies was the shortest way for Vietnamese enterprises to participate in the global supply chain, but not many of them succeeded. According to a VASI study, support activities have only successfully linked a few enterprises to foreign businesses on an annual basis. The reason behind the assessment is the small scale of Vietnamese firms, as well as low competitiveness, and shortage of financial resources. These shortcomings conspire to cause Vietnamese firms to be unable to meet requirements of giant partners. Viet Nam currently houses approximately 500 companies capable of supplying foreign groups. Binh said the key for Vietnamese supporting enterprises to develop and participate more deeply in the chain of super-manufacturers was to cut production costs. They needed better access to credit, land, production premises, and factory building procedures, she said, adding that it was also necessary to increase their size and form clusters of enterprises and ecosystems serving the production of complete assemblies. The official also recommended promoting localisation by preferential policies on tax, labour, and research and development (R&D). HCMC proposes extracting sand from Dau Tieng Lake to build Beltway 3 The HCMC government has proposed the authorities of Tay Ninh, Binh Duong and Binh Phuoc provinces extract sand from the Dau Tieng Lake for the construction of Beltway 3. The proposal aims to ease the sand shortage for the construction of the beltway and help ensure the project can be carried out on schedule. The city has also asked the three provinces to provide information on sand reserves in the Dau Tieng Lake area, including mining licenses and the volume to be exploited. Moreover, the local authorities are also asked to work with relevant units to check the quality of sand and supply construction materials for the beltway project. According to estimates, the project would need around 1.6 million cubic meters of soil, 7.2 million cubic meters of sand for the road foundation, 1.5 million cubic meters of sand for construction and 4.4 million cubic meters of stone. Currently, the sources of stone and soil for the road foundation are basically enough. However, the project lacks sand for the road foundation. The 76-kilometer-long Beltway 3 project in HCMC is one of the key traffic infrastructure projects in the country, which is scheduled to get off the ground in June 2023. Insurance agencies to review processes, conduct: MoF Insurance companies must tighten the supervision and inspection of insurance agencies, quality of consultation, and sales, said the Insurance Supervisory Authority, the country's insurance industry regulator under the Ministry of Finance. The supervisory said it had received numerous negative feedback from the public over poor insurance consultation, poor transparency and presentation of insurance products. It demanded insurance agencies immediately take measures to provide clients with complete and accurate information and review the quality of their agents' consultation and sales techniques. It stressed that agents' violations would be dealt with, and their agencies would bear part of the responsibility if said agents acted on the agencies' behalf. Meanwhile, the ministry proposed agencies to review and improve customer service quality, business operations, internal regulations and risk management to ensure they are all in compliance with current regulations. In an earlier development, a Vietnamese actress live-streamed her grievances over her family's insurance policy and attracted a large amount of attention from the public. The actress said she bought the policy from Aviva JSc., which was later acquired by MVI Life, and was shocked to find out clauses that she was not aware of previously. MVI Life said they had been in contact with both the actress and her lawyer to work out the details of her policy. The insurance company said all clients' rights and benefits were guaranteed after Aviva's acquisition, and the company adjusted the actress's policy after she requested them. The Ministry of Finance later issued a demand to MVI Life, requesting the agency to review the entire contract it has provided the actress, the disclosure of information during the process and its customer service quality. MVI Life has been told to review how agents present products and consult clients and the information they provide. If its agents were found to have violated insurance sales regulations, the agency would be held responsible. The ministry said it expected a report from MVI Life shortly. Three pharma firms have import licenses suspended over quality violations The Drug Administration of Vietnam has decided to suspend the licenses of three pharmaceutical companies for the import of pharmaceutical products and materials over quality violations, the local media reported. The three companies are the HCMC Medical Import Export Joint Stock Company, the R.X. Manufacturing Company Limited from Thailand, and the Zuellig Pharma Vietnam Limited. The HCMC Medical Import Export JSC has had its import license suspended until further notice because it imported 11 batches of Myomethol for treating acute osteoarthritis pain that violate quality standards. Similarly, R.X. Manufacturing Co., Ltd. has been banned from importing all drugs and drug materials as the company produced and supplied the 11 batches of Myomethol mentioned above. The suspension is valid for one year, starting April 7, 2023. In addition, the Drug Administration fined the company VND80 million and forced it to destroy all drugs that failed to meet quality standards in late March 2023. The application for a drug import license from the branch of Zuellig Pharma Vietnam has also been suspended, as it previously bought two batches of Zinnat Suspension and two batches of Neurobion that violated quality standards. The duration of the suspension will be announced later. The agency had revoked the registration certificate for the circulation of Zinnat Suspension antibiotics in Vietnam due to the quality violation. Binh Duong among five localities with highest budget revenue collection The southern province of Binh Duong has contributed 14.94 trillion VND (637 million USD) to the State budget in the first quarter, ranked among the top five localities with the highest figures nationwide. According to the provincial tax department, the Q1 collection fulfilled 33.03% of the yearly estimate assigned by the Ministry of Finance and was 20.25% higher than the same period in 2022. Head of the department Nguyen Van Cong attributed the increase to a Government’s regulation requiring that businesses must temporarily pay 80% of their tax on January 31 this year and to the larger-than-last-year amount of some land leasing revenue. As of the end of 2022, Binh Duong had attracted more than 4,082 foreign direct investment (FDI) projects worth nearly 40 billion USD of registered funds, placing it among the top two localities in the country in FDI attraction, just after Ho Chi Minh City. Also last year, its budget revenue collection amounted to some 61.94 trillion VND. Tra fish by-products to become huge money earner: Experts Stronger investment into processing by-products of tra fish will be a way for Vietnam to optimise their huge potential and values amid the expanding tra fish sector, according to experts. Statistics showed that each year, aquaculture provides 4.5-5 million tonnes of materials for aquatic processing. In the tra fish sector, 60-70% of the materials for tra fish fillet processing become by-products. Tran Dinh Luan, Director of the Directorate of Fisheries, said by-products, including include head, bones, fin, skin and organs, are a source of materials that can promote the added value for the tra fish sector if they are optimised. For example, raw tra fish skin is often sold at 3,000 VND (0.13 USD) per kilo. However, the price of collagen and gelatine made from it is 1,000 times higher, at about 3 million VND per kilo, said Doan Toi, General Director of Nam Viet Corporation (Navico). Toi said that in early April, Navico and its partner from the Republic of Korea launched a 7-million-USD factory producing collagen and gelatine from fish skin, with a capacity of processing 780 tonnes of materials per year. In the second and third phase, the factory’s capacity is scheduled to reach 1,200 and 2,400 tonnes per year, he said. This is the first factory that can produce collagen peptide in Vietnam. Navico expects 1.5 million USD of profit in the first phase. By now, the factory has received orders from 15 customers. Like Navico, Vinh Hoan Corporation in the Mekong Delta province of Dong Thap has also engaged in collagen and gelatin production from fish skin, which has contributed 10% to the overall profit of the company. Meanwhile, the Asia Fish Oil Corporation in Dong Thap province has successfully produce fish oil from tra fish fats with a capacity of processing 400 tonnes of materials. At the same time, the firm has also processed other by-products from tra fish into organic fertilisers and animal feed. Directorate of Fisheries head Luan advised businesses to invest more in technology, enhancing the economic efficiency in processing products with high added values, while making full use of the Government’s policies to encourage the development of processing sector, heading to a circular economy in the fisheries sector. Huynh Minh Tuan, Vice Chairman of the People’s Committee of Dong Thap, said that the locality always encourages local firms to renovate their tra fish processing towards higher added value, aiming to make the most of the by-products and contributing to the growth of this billion-USD sector. Data from the Vietnam Association of Seafood Exporters and Producers (VASEP) showed that in the first two months of this year, revenue from seafood export topped 1.1 billion USD, down 26% year on year, with tra fish exports dropping 38% to 240 million USD. However, tra fish industry will have to overcome difficulties and become profitable again in the third quarter of this year as demand is likely to recover from the third quarter as festive events in year-end are coming and the Chinese market is opening. Dong Thap registers to grow 51,900 hectares of low-carbon rice The Mekong Delta province of Dong Thap has registered to cultivate 51,900 hectares of low-carbon rice in 2024 to align with the Ministry of Agriculture and Rural Development’s plan to grow one million hectares of high-quality rice for the green growth of the Mekong Delta. The Dong Thap government wrote to the Ministry of Agriculture and Rural Development to register 51,905 hectares of land for high-quality rice cultivation next year, 70,000 hectares in 2025 and 163,000 hectares in 2030, the Vietnam News Agency reported. One million hectares of high-quality rice could be considered a model of low-carbon rice cultivation. The project is expected to win support of international partners in terms of financial resources, science and technology, given the global challenges of climate change and food security. Simultaneously, selling carbon credits via low-carbon rice production will contribute to realizing Vietnam’s commitment to net-zero emissions by 2050. The plan helps farmers cut costs, improve their farming skills and at the same time adds value to Vietnamese rice and promotes the Vietnamese rice trademark in the international market. According to the Ministry of Agriculture and Rural Development, the ministry has worked with the World Bank on the possible carbon credit payment in 2024 for the low-carbon rice cultivation area under the Vietnam Sustainable Agriculture Transformation Project. Prime Minister chairs meeting to remove obstacles for national key transport projects Prime Minister Pham Minh Chinh on April 12 asked the State steering committee for national key transport projects to regularly review and inspect the projects so as to complete the heavy workload until 2026. Presiding over a session of the committee, the Government leader noted that the State has earmarked 400 trillion VND (17.05 billion USD) for transport development for the 2021-2026 period, saying the transport projects have been scattered across the country, connecting six socio-economic regions. Chinh, who is also head of the committee, said among the three growth engines – investment, consumption and export, the last relies much on foreign markets, yet many of which have tightened their monetary policies and cut aggregate demand. He pointed out that Vietnam can work to boost the last two factors of investment and consumption. Therefore,  it is necessary to stimulate domestic consumption and promote public investment, the leader stressed. To boost public investment, ministries and agencies must step up administrative reform, approve projects quickly, work harder in site clearance and speed up construction work, he said, adding that public investment helps create jobs and livelihoods for people, stir up economic activities and spur national development. The PM urged committee members, and leaders of ministries, agencies and localities to raise the sense of responsibility and actively fight corruption during the roll-out of national key transport projects. B2B digital payment accelerates In Việt Nam, business-to-business (B2B)-focused fintech presents new revenue and growth streams for enterprises of all sizes, experts said. A recent McKinsey study noted that business disruptions caused by the pandemic have pushed companies to accelerate their digital journeys. This has fueled B2B e-commerce, and the trend is here to stay as B2B buyers are increasingly comfortable with digital channels. B2B relationships are vastly different from business to consumer (B2C), as buyers and suppliers often have long-term relationships. Interoperability is key to closing the gaps, allowing consumers and merchants from different markets and payment schemes to do business seamlessly around the world. As B2B e-commerce strongly develops, digital payments have been steadily rising, with the shift to online payments most seen among emerging consumer groups. Online marketplaces and payment portals for various services and utilities have become preferred channels for consumers comfortable with using these secure means of shopping and paying for purchases. According to Visa’s Consumer Payment Attitudes Study 2022, over 70 per cent of Vietnamese consumers are generally receptive to open banking, especially fintech and non-bank service providers that can open an account for them using their existing data with banks. The ever-growing fintech space, however, presents growth not only for B2C companies. B2B enterprises across various industries can similarly leverage fintech to tap new markets for rewarding opportunities. Traditionally, commercial card-based payments have been used to support travel and entertainment-related business’s expenses. However, an increasing number of industry verticals are now using digital B2B payment solutions to respond to challenges within supply chain payments. Fintech has also responded to the challenges brought on by cross-border payments. With the emergence of B2B e-marketplaces, which need to ensure a fast and smooth payout to sellers on their platforms, solutions such as virtual cards allow for the elimination of cross-border wire transfer complexities and enable improved data transparency and reconciliation. Hanoi addresses bottlenecks on highway, real estate projects Chairman of the Hanoi People's Committee Tran Sy Thanh has signed Official Letter No. 992 on the need to address issues related to land and construction materials in order to effectively carry out the construction of roads, highways, and real estate projects in the city. In response to the Premier's call to address issues related to land and construction materials in highway and real estate investment projects, the Mayor has instructed relevant departments, branches and district people's committees to conduct research and take action based on their assigned functions and responsibilities. Local authorities are also urged to proactively seek solutions to remove obstacles and challenges related to land and construction materials in the implementation of investment projects, with special emphasis on the construction of Ring Road 4 and real estate projects in the city, based on the actual conditions in the city. The Chairman of the Hanoi People's Committee instructed the Department of Natural Resources and Environment to take the lead and work with other relevant departments such as the Department of Construction, the Department of Finance, and the Investment Project Management Board to oversee the exploitation and supply of construction materials for highway projects. They will also be responsible for setting land prices, allocating land, leasing land, and changing land use for real estate investment projects. In case of difficulties or obstacles, the Department of Natural Resources and Environment will promptly advise and propose solutions to the Municipal People's Committee to solve these problems and ensure that the assigned tasks are carried out efficiently. As part of the assigned tasks, the Department of Construction is responsible for coordinating with the Planning and Investment, Planning-Architecture, and Natural Resources and Environment departments, along with district-level People's Committees, relevant agencies, and units to research, plan and implement solutions related to the construction of social housing and accommodation for workers. HCMC to urgently address proposals of sci-tech companies Chairman of HCMC People’s Committee Phan Van Mai has just directed the municipal departments and agencies to consider proposals submitted by the business community here. This action is to prepare for the upcoming formal discussion between the city leaders and innovative, sci-tech companies to be held this month. The survey by the two Departments of Science-Technology and Information and Communications has collected a number of proposals and opinions to address current problems of enterprises in the city in the: _transformation of a business into a sci-tech one;