BUSINESS NEWS IN BRIEF 8/4

Vietnam’s economy to expand 6.8 percent in 2019: ADB

ADB Country Director for Vietnam Eric Sidgwick (Source: laodong.vn)


The Asian Development Bank forecasts Vietnam’s economy to grow by 6.8 percent in 2019 and 6.7 percent in 2020. 

In its flagship annual economic publication, Asian Development Outlook (ADO) 2019, the ADB said Vietnam’s economy remains strong growth momentum though moderating amid weakening global outlook. 

Speaking at a press conference held in Hanoi on April 3 to announce the publication, ADB Country Director for Vietnam Eric Sidgwick said that the economic performance in Vietnam reached a sweet spot in 2018, driven by strong exports and domestic demand.

Economic growth will likely hold up well in the near term, supported by export-oriented manufacturing, foreign direct investment, and sustained domestic demand. The growth momentum is expected to continue, thanks to ongoing reforms to improve the business environment and encourage private investment,” he added. 

Vietnam’s inflation is expected to average 3.5 percent in 2019 and 3.8 percent in 2020, the report said. 

According to the report, growth will continue to be broad-based, underpinned by robust private consumption, the continued expansion of manufacturing, services, and agriculture, and greater market access for Vietnam’s exports through various free trade agreements, including the recently ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership

It also mentioned risks for Vietnam’s economy, saying that the world’s major economies -Vietnam’s key trading partners- are weakening. Vietnam is one of the most trade-dependent countries in the region, with trade volume reaching twice the size of its gross domestic product (GDP).

Domestically, lackluster progress in state-owned enterprises reform could be a drag on growth, it added. 

The report underlined the importance for Vietnam to strengthen private firms’ integration in the global value chains (GVCs), which is a key policy challenge for Vietnam’s long-term growth.

Improving small-and medium-sized enterprises’ (SMEs) access to finance, and enhancing SMEs’ capability, including workers’ skills, are among important measures to enable SMEs to better adopt new technologies and have more value addition in GVCs, it stressed.

First-quarter FDI attraction comes into spotlight

first-quarter fdi attraction comes into spotlight hinh 0

Inflows of foreign direct investment (FDI) have shone a spotlight on the country’s economic growth in the first quarter of this year, featured by the attraction of many large-scale and high-tech projects.

Registered and additional FDI touched US$5.1 billion in the first quarter of 2019, up 30.9 per cent on year.

Mai Tien Dung, Minister-Chairman of the Government Office, made the remark during an April 2 press briefing highlighting the outcomes of the Government’s annual March meeting.

Statistics released from the Foreign Investment Agency under the Ministry of Planning and Investment point out that the total registered, additional, and shared capital of FDI investors leaped by 86.2 per cent on year to US$10.8 billion, hitting a peak over the past three years. Of which, the registered and additional FDI touched US$5.1 billion, up 30.9 per cent on year.

FDI disbursement soared by 6.2 per cent to US$4.12 billion during the reviewed period.

The chairman noted that FDI inflows are forecast to face a range of unpredictable developments that could occur in the global economy in the future.

Local investment and business climate improved considerably during the year’s first quarter, with the number of newly-established businesses reaching the highest level seen in the past five years.

Chairman Dung stressed that the number of newly-established businesses and those preparing to restart their operations exceeded 43,500 in the reviewed period. Of this figure, 28,451 were newly founded, a hike of 6.2 per cent.

According to the General Statistics Office of Vietnam (GSO), the first quarter of 2019 saw GDP value surge by an estimated 6.79 per cent on year, much higher than the ratios seen in the first quarter of the years between 2011 and 2017. Meanwhile, efforts to maintain macroeconomic stability and curb inflation continued to yield impressive results.

The country’s economic growth in the three-month period was largely driven by the processing and manufacturing sector which enjoyed growth levels of 12.35 per cent. By contrast, the mining industry suffered a negative growth rate of 2.2 per cent.

Agro-forestry-aquatic production in particular saw a growth rate of 2.68 per cent, accounting for 4.9 per cent of GDP value. Whilst enjoying growth of 8.63 per cent, industrial production and construction accounted for 51.2 per cent of GDP value. Service sector reaped a growth rate of 6.5 per cent, representing 43.9 per cent of GDP.

Exports enjoyed robust growth in the three-month period. Overseas shipments during March soared by 61.1 per cent to US$22.40 billion.

The country posted a trade surplus of US$1.56 billion in March, reported the General Department of Vietnam Customs.

Ho Chi Minh City’s scarce apartment launches hit Q1 figures

ho chi minh city’s scarce apartment launches hit q1 figures hinh 0

The supply of primary apartments in Ho Chi Minh City (HCMC) stood at 12,000 units during the first quarter of this year, representing a drop of 34 per cent on quarter and 57 per cent on year, as noted by a professional property service provider.

The steep drop was largely caused by low inventory, administrative delays, and changes in developers’ plans, real estate services provider Savills Vietnam said in a freshly-issued report on HCMC market developments in the first quarter of this year.

The firm claims that there were a total of 4,500 primary units added to the market, down 38 per cent on quarter and 27 per cent on year. Meanwhile Grade C was the largest primary supplier with an 85 per cent market stake, mainly located in suburban areas, including Districts 8 and 9.

Quality supply that is able to deliver will be quickly absorbed, said Nguyen Khanh Duy, Director of Savills Residential Sales.

Meanwhile, primary sales posted a plunge. In total there were approximately 6,400 sales, falling by 42 per cent on quarter and 52 per cent on year. These drops were partly caused by national holidays in January and February.

Absorption was 53 per cent in the first quarter, up 5 percentage points on year. New projects accounted for 46 per cent of sales while suburban districts such as District 8, Tan Phu, and Binh Tan dominated the market. One to two-bedroom apartments continued to be highly sought-after as they meet both end-user and investment demand.

With limited primary launches, secondary prices are now on the rise. According to Savills, local authorities expect current administrative delays to be normalized in 2019.

Projects with a clear master plan are increasingly desired by prospective purchasers.

Foreign purchasers are pinning their interest on high-end projects, with the 30 per cent foreign quota quickly filling up.

This trend is predicted to continue, with higher price points expected across all grades. Grade C in particular will continue to dominate and lead the way in the domestic market.

Vietnam becomes China’s second largest tourism market

Vietnam overtook South Korea to claim second spot among top 10 source markets for tourism in China last year.

According to statistics released late last month by China’s Ministry of Culture and Tourism, more than 6.3 million Vietnamese tourists visited the country last year, double the figure in 2016, making Vietnam the second biggest feeder market for Chinese tourism after Myanmar.

South Korea ranked third on the list of top 10 major markets for inbound tourism in China, followed by Japan, the U.S., Russia, Mongolia, Malaysia, the Philippines and Singapore.

China, forecast to become the world’s most visited country by 2030 by global research company Euromonitor International, received a total of 141.2 million foreign tourist arrivals in 2018, up 1.2 percent from a year ago and earned $127 billion in tourism revenues.

China’s proximity to Vietnam has made it a popular destination among outbound Vietnamese travelers who want a vacation overseas without a long haul journey.

The surge in Vietnamese tourist numbers in China has been credited to the long shared border, prompting the governments of both countries to establish a special type of border travel, which does not require passports or visas.

The launch of more direct flights connecting Vietnam’s big cities like Hanoi and Ho Chi Minh City with China in recent years has also contributed to the growth in outbound Vietnamese travelers.

China has always been Vietnam's main source of tourists in recent years, accounting for one third of all foreign visitors. More than four million Chinese visitors arrived in Vietnam last year, up 48.6 percent year-on-year.

Survey results released last year by the Vietnam National Administration of Tourism, reveal the average daily spending by the Chinese in Vietnam increased from $118.6 in 2014 to $130 last year.

This was below what Chinese visitors spent in Thailand ($180), Indonesia ($183) and Singapore ($446).

A Bloomberg report said Chinese tourists could have a big impact on Vietnam’s economy. It said a 30 percent increase in spending by Chinese tourists would boost Vietnam’s economic growth by nearly 1 percentage point. For Thailand, that would be around 1.6 percentage points.

"Chinese tourism is pretty big for ASEAN now, and all the countries rely on Chinese visitors to keep coming and keep spending," Edward Lee, an economist with Standard Chartered Plc in Singapore, was quoted as saying in the report.

CPTPP countries – potential markets for Vietnamese wood industry

Processing wood for exports


Countries joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are potential markets for Vietnamese wood firms, said Nguyen Ton Quyen, Vice Chairman of the Vietnam Timber and Forest Products Association.

Quyen said when the agreement comes into effect, Vietnam’s wood and timber product exports to New Zealand, Singapore and Mexico will increase. 

The Southeast Asian country will also be able to expand exports to Peru, Chile and Brunei, he added.

In 2018, the total export turnover of Vietnam's wood and timber products to the CPTPP markets exceeded 1.6 billion USD, up 14.6 percent compared to 2017 and accounting for 18.3 percent of the country’s total wood and timber product export value. 

Specifically, Vietnam exported wood to Japan with a record high of 1.119 billion USD, a year-on-year increase of 12.16 percent.  

Australia was second with 174.05 million USD, up 14 percent, then Canada at 155.89 million USD.  

Exports to Malaysia and Mexico also surged by 86 percent and 61 percent respectively. . 

Quyen said Japan has always ranked first, accounting for 69 percent of Vietnam's total exports of wood and timber products to the CPTPP countries. 

Australia was the second biggest wood importer among countries joining the deal as it has big demand for wooden furniture. 

Vietnam is the fourth biggest supplier of furniture for Canada, comprising about 12.9 percent of the market’s furniture import turnover.

Nguyen Quoc Tri, Director General of the General Department of Forestry under the Ministry of Agriculture and Rural Development, said the sector will implement the Law on Forestry and build guidance documents on mechanisms and policies to implement new international commitments such as CPTPP, Voluntary Partnership Agreement (VPA) on Forest Law Enforcement, Governance and Trade (FLEGT) to support the wood processing and forestry industry with stable development.

It will support Vietnamese wood businesses and associations to update market information and legal regulations on wood as well as increase their management capacity, he added.


PM gives nod to Moc Chau national tourist site planning

The map of the core area of the key tourism centre under the Moc Chau national tourist site planning


Prime Minister Nguyen Xuan Phuc has issued a decision approving the planning of the Moc Chau national tourist site in the northern mountainous province of Son La by 2030. 

A conference to announce the PM’s Decision No.128/QD-TTg dated January 25, 2019 was held in Moc Chau district, Son La province, on April 2. 

Accordingly, the tourist site will cover a total area of 206,150 ha in Moc Chau and Van Ho districts, divided into three zones for resorts, eco-tourism and entertainment activities. 

The population in the national tourist site is projected to reach about 205,000 by 2020 and 274,500 by 2030. Meanwhile, the number of holidaymakers to the site is set to hit some 1.65 million by 2020 and around 5 million by 2030. 

The site is expected to have 6,200 rooms by 2020 and about 20,000 rooms in the next decade. 

Apart from social infrastructure development, Son La is required to promote personnel training in tourism services and high-tech agriculture, while working to improve the local healthcare system and environmental protection.

Speaking at the conference, Vice Chairman of the provincial People’s Committee Le Hong Minh said the planning will create the legal foundations for the management of construction investment and tourism development in the locality. 

It is also a significant step for the socio-economic development strategy of the Northwestern region and Son La province in particular, he added. 

The planning will help connect Son La with other localities in the region, lure more tourists and investors to the province, and maximise its potential, the official noted. 

Deputy Minister of Construction Phan Thi My Linh asked Son La to instruct departments, agencies, and People’s Committees of Moc Chau and Van Ho districts to coordinate with relevant ministries and agencies to soon issue management regulations in accordance with the planning. 

Son La needs to promptly devise plans on investment in construction of technical infrastructure and land management, and harmonise economic development with environmental protection, she said.

Dong Nai enjoys trade surplus in Q1

Workers at a garment-textile factory

The southern province of Dong Nai enjoyed a trade surplus of 690 million USD in the first quarter of 2019, said the provincial Department of Industry and Trade.

The province raked in 4.58 billion USD from exports in the period, a rise of 7.05 percent year-on-year. In March alone, the figure stood at 1.76 billion USD, surging 70.82 percent against the previous month.

The growth is attributable to the stabilised production of local firms after the traditional Lunar New Year (Tet) holidays, as well as advantages from export markets and free trade agreements.

Major items recording high export growth in March included rubber (47.94 percent); footwear (20.58 percent); machinery, devices, and spare parts (19.12 percent); wooden products (10.95 percent); and garment-textile (8.75 percent).

In the month, the province’s exports to Japan increased 21 percent, followed by its exports to the US (18.39 percent) and China (11.3 percent).

According to Dong Nai Department of Industry and Trade, the province’s exports are expected to speed up in the following months, especially for its staples, such as garment-textiles, footwear, processed food, confectionery, and tobacco.

Hanoi ensures sufficient power supply in 2019

EVNHN Deputy General Director Nguyen Anh Tuan speaks at the event 


The Vietnam Electricity’s Hanoi Power Corporation (EVNHN) pledges to ensure sufficient power supply to people in the capital city of Hanoi in 2019, said its Deputy General Director Nguyen Anh Tuan during a meeting of the municipal Party Committee on April 2. 

Tuan said due to the prolonged hot weather, the power grid may face overloading during summertime, with the capacity of power use rising from 10 percent to 15 percent, or over 4,600 MW to more than 4,800 MW. 

According to him, EVNHN worked with the municipal Department of Industry and Trade to build a scenario in response to any large-scale contingency, which was approved by the municipal People’s Committee. 

During summertime, EVNHN asked units to upgrade power grids and ensure personnel-on-duty to prevent power line and transformer overloads. 

In the first quarter of this year, the corporation ensured sufficient power supply for local businesses and people, especially for major socio-political events such as the second DPRK-USA summit which took place in Hanoi.

PM orders hindrances be addressed to fuel growth


Workers weld car frames at the factory of the Ford Vietnam Co. Ltd in Hai Duong province 


Prime Minister Nguyen Xuan Phuc has issued Directive 09/CT-TTg, specifying solutions to remove obstacles to production and business activities so as to achieve this year’s growth target.

In this directive, he made clear that the gross domestic product (GDP) growth rate of 6.79 percent in the first quarter of 2019 was lower than the predicted scenario.

Difficulties hampering economic growth have appeared, he said, noting that the expansion of processing and manufacturing has slowed down; the export of some key commodities has dropped; the disbursement of public investment capital, especially for major projects, has yet to meet expectations; while animal diseases, particularly African swine fever, have become complicated.

Therefore, to attain this year’s growth target of 6.8 percent, tasks for the remaining months, including tackling hindrances to production and business and promoting economic growth, are “very heavy”, requiring stronger efforts by all sectors and authorities at all levels, PM Phuc emphasised.

He asked ministers, heads of governmental agencies, chairpersons of provincial-level localities’ administrations, and State-owned enterprises to concertedly and effectively implement tasks and solutions.

Noting seven solutions to facilitate production and business activities and economic growth, the directive underlined the need to step up institutional building.

It pointed to the necessity to strongly improve the investment and business climate, substantively reduce business conditions, reform administrative procedures, and remove production and business bottlenecks so as to create momentum for enterprises’ expansion.

Other solutions include taking drastic measures to control animal diseases; fostering agro-forestry-fishery development to serve export; and accelerating the disbursement of capital for big industrial projects.

The Government leader also demanded synchronous measures be carried out to fully tap into the domestic market and fuel export growth; tourism be developed strongly to help boost other production and service sectors; and national conferences be held to seek ways bolstering growth.

742,100 foreign tourists visit Ho Chi Minh City in March

Ho Chi Minh City welcomed more than 742,100 foreign tourists in March, up 10 percent against March 2018, the municipal Tourism Department announced on April 1.

In the first quarter of this year, the city served some 2.25 million international visitors, earning 1.71 billion USD in revenue, equal to 27 percent and 26.6 percent of the yearly targets, respectively.

The Tourism Department plans to continue coordinating with districts to encourage food service facilities to join a standardised service system and will work with the Health Department to ensure healthcare services for tourists.

It also plans to organise a dialogue on the hotel business in the digital era so as to improve the quality of services and attract more visitors to the city.

Ho Chi Minh City welcomed more than 7 million foreign tourists last year. It aims to expand tourism growth of between 15-20 percent and serve about 8-8.5 million foreign holiday makers in 2019.

Nation’s industrial production surges 9.2 percent in Q1

Coke is loaded onto a truck to be transported to factories in the northern province of Quang Ninh (Photo: vietphatjsc.com.vn)

The national industrial production index (IIP) saw a year-on-year increase of 9.2 percent in the first quarter of this year, according to the General Statistics Office (GSO).

The positive growth was fuelled by the processing and manufacturing industry which increased remarkably by 11 percent compared to the same period last year, head of the GSO Nguyen Bich Lam told a recent conference in Hanoi.

He added the index rose 9.4 percent year-on-year for electricity production and distribution and 8.5 percent for water supply and waste treatment.

Meanwhile, the mining industry fell 2.1 percent in the three-month period.

Several sectors recorded IIP surges such as coke production (96 percent); metal manufacturing (37 percent); motor vehicles (21 percent); rubber and plastics (13 percent) and beverages (11 percent).

Other products that recorded a high production index compared with the same period last year included refined petroleum products (up 73.2 percent), iron and steel (65 percent), television sets (50 percent) and liquefied petroleum gas (38 percent). Others included urea fertiliser (up 13 percent), footwear (12 percent) and fish feed (11 percent).  

From January to March, the IIP of 59 out of 63 provinces and centrally-run cities increased over the same period last year. The central province of Thanh Hoa recorded the highest IIP growth rate at 51.2 percent thanks to the Nghi Sơn oil refinery and petrochemical plant in the locality officially began commercial operations in December.

The southern province of Tra Vinh came next with growth of 41 percent because of the Duyen Hai thermal power plant’s production expansion. It was followed by the central province of Ha Tinh (34 percent) and the northern port city of Hai Phong (20 percent). The northern provinces of Vinh Phuc, Quang Ninh and Hai Duong recorded 12 percent, 10 percent and 9.5 percent, respectively.

Meanwhile, the country’s economic hubs of Ho Chi Minh City and Hanoi lagged behind with respective IIP increases of 7 percent and 7.2 percent, the GSO noted.   

According to the office, the number of employees working at industrial companies as of March 1 had risen by 2.3 compared to a year ago. 

Manufacturing enjoys strong growth in March

The Nikkei Vietnam Manufacturing Purchasing Managers’ Index (PMI) posts 51.9 points in March, up from 51.2 in February. 


Vietnam’s manufacturing sector continued to expand during January-March with signs of higher growth in March, according to a report from IHS Markit. 

The Nikkei Vietnam Manufacturing Purchasing Managers’ Index (PMI), a composite single-figure indicator of manufacturing performance, posted 51.9 points in March, up from 51.2 in February and signaling an improvement in the health of the sector for the 40th successive month. Although registering below the 2018 average, the PMI was comfortable above the 50.0 no-change mark at the end of the first quarter.

The sector saw its March output increase at the fastest pace since November last year while total new business and exports also rose more quickly than in February. However, employment continued to decline marginally. Meanwhile, the rate of input cost inflation remained relatively weak, providing scope for firms to lower their output prices. 

New orders rose for the 40th month in a row during March amid increased customer numbers and growth of new export business. Moreover, the rate of expansion in total new orders was the fastest in three months.

The rate of growth in manufacturing quickened for the second consecutive month, and was slightly faster than that seen for new business. This enabled firms to reduce their backlogs of work and add to stocks of finished goods. 

The increase in output was recorded in spite of a slight reduction in staffing levels in March. Panellists suggested that employee resignations had hampered their efforts to expand workforce numbers in response to greater workloads. 

As has been the case throughout 2019 so far, inflationary pressures remained muted in the sector at the end of the first quarter. Input costs rose marginally and at a pace that was well below the series average. This lack of pressure on costs meant that firms were again able to offer discounts to customers. Charges decreased for the fourth consecutive month, albeit fractionally.

Vietnamese manufacturers responded to higher output requirements by increasing their purchasing activity sharply, with the rate of expansion the fastest year-to-date. Stocks of purchases decreased, however, as inputs were used to support production growth. The fall in input inventories was the second in as many months.

Meanwhile, suppliers’ delivery time was shortened for the first time in over two years, following broadly unchanged vendor performance in February.

Almost half of all respondents to the latest survey predict output to increase over the coming year. Strong optimism reflected expected improvements in market demand and investment in expanding productive capacity. These factors are forecast to help firms meet their plans for higher output. Confidence in March was higher than in February and broadly in line with the series average.

Commenting on the Vietnamese PMI survey data, Andrew Harker, Associate Director at HIS Markit said: “While still some way short of the strong growth rates recorded last year, the manufacturing PMI data for March suggest that Vietnamese firms have weathered the recent slowdown in global trade and were able to continue to secure greater new order volumes and expand production. IHS Markit currently forecasts industrial production to grow 8.2 percent in 2019, with PMI data suggesting that the manufacturing sector will continue to contribute positively to this.”

First Ba Na village in Gia Lai adopts high-tech farming

first ba na village in gia lai adopts high-tech farming hinh 0

Backward production methods create a bottleneck in the economic development of many ethnic minority villages in the Central Highlands. A Ba Na girl in a remote village in Gia Lai province has changed traditional farming by undertaking a project to grow medicinal herbs using advanced technology.

The high-tech medicinal tea project is praised for great potential for boosting economic growth in ethnic minority villages in Gia Lai province.

Taking advantage of available resources, changing ways of thinking and doing, and applying technical advances are helping the locals develop their economy.

Dinh Thi Vien, a Ba Na girl who lives in remote Po Nang village in Gia Lai province, and her high-tech medicinal tea project are surprising many local villagers.

Viên said because growing traditional crops like sugar cane and cassava recently has had lots of trouble making a decent profit, the locals must look in new directions.

Through social networks, Vien discovered that the species solanum hainanense hance, which is widely used in her village, enjoys strong market demand.

Vien found a business to partner with and supported by the local government and fellow villagers, launched a project that has the potential to boost the entire village’s economy.

“As a Ba Na person, I want to see my fellow villagers start growing medicinal herbs. The species solanum hainanense hance is already available. We just need to know how to collect, grow and process it. The villagers themselves are consumers. This project will generate new jobs for the locals, especially women and youths,” Vien said.

The idea first came to Vien in 2017. One year later her medicinal herbal tea project was deployed in Po Nang village. 10 local households now participate in the pilot program, growing herbs on 2 hectares.

The herbs are grown organically using high-tech methods and an irrigation system that conserves water. In order to balance supply and demand, the farmers have worked closely with nearby cooperatives.

Le Van Bo, Director of the Tu An Agriculture Cooperative in Gia Lai province, credits the cooperative’s decision to work with the Po Nang villagers for the project’s strong potential.

Bo recalls “When we met Vien, she and the villagers were already planning to put the species solanum hainanense hance into mass production. Their determination convinced us to cooperate with them. We plan to make and sell tea bags because the product has strong health benefits.”

The project is in the top 20 of 128 agricultural projects for which the Government Committee for Ethnic Minority Affairs has requested the World Bank’s financial support, and is part of a program to achieve rapid, sustainable economic growth in remote, isolated, ethnic minority areas.

Nguyen Thanh Canh, Chairman of the Tu An Commune People's Committee, says that once it is listed in the World Bank top 5, the project will be funded.

Even without World Bank funding, the project will continue in Po Nang and will eventually be expanded to other ethnic minority villages, Canh said, adding “Based on the results of this pilot project, we will expand to three other ethnic minority villages. The Po Nang model and will be continued in Nhoi village and Hoa Binh village.”

CPTPP to give boost to manufacturing - processing industry
cptpp to give boost to manufacturing - processing industry hinh 0

A slew of major Vietnamese exports are set to benefit from golden opportunities emerging from the CPTPP trade pact which came into force in Vietnam on January 14.

Origin rules emerge as a considerable barrier for local garment and textile sector since up to 60 per cent of textile inputs and garment materials are imported from non-CPTPP member countries.
According to the Industry Agency under the Ministry of Industry and Trade (MoIT), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is hoped to leverage exports from the domestic manufacturing and processing sector, including garments and textiles, footwear, wooden items, and aquatic products.

Joining the CPTPP helps Vietnam to multilateralize its foreign economic and trading relations as well as avoiding potential risks of relying heavily on some major importing countries.

The new - generation trade pact is projected to significantly offer arrangements and orders with new importers, especially those from countries that Vietnam has yet to sign a free trade agreement with.

Notably the CPTPP membership enables Vietnam to establish free trade partnerships for the first time with three countries in the Americas, including Canada, Peru, and Mexico.

Goods imported into these countries would enjoy very favorable tariff incentives as Canada, Peru, and Mexico have all pledged to slash tariffs by 94 per cent, 81 per cent, and 77 per cent respectively once the pact takes effect. This would give big advantages to Vietnam’s manufactured and processed exports, including garments and textiles, footwear, wooden items, and aquatic products.

Canada has already committed to reducing the tariff levied on wooden items and furniture from 9.5 per cent to 0 per cent, excluding indoor wooden chairs immune from tariffs six years after the CPTPP comes into force.

This move is of great significance to Vietnamese wooden items as such category exported to Canada amount to US$166 million a year. The Southeast Asian country provides 30 per cent of all wooden items imported into Canada, making itself the largest provider of such category to the North American country.

High hopes are set for the Mexican market. Historically, Mexico has not been a major importer of Vietnamese wooden items with the country currently imposing high tariffs of between 10 and 15 per cent on its wooden imports.

However, Mexico is set to remove all tariffs on wooden products, including wood flooring, furniture, and exterior wooden items as part of a 10-year roadmap laid out by the CPTPP. This could provide a chance for Vietnamese wooden firms to deepen their footprint in the Mexican market.


Experts believe that the CPTPP will help to give impetus to the growth of Vietnam’s manufacturing and processing industry. The trade deal is poised to drive local firms to make changes to their production methods, improve their competitive edges, and bring product quality on par to match global trends.

Despite these positives, there remains questions on how best to grasp the export chances arising from the CPTPP. In order to enjoy tariff incentives from the new-generation deal, Vietnamese goods must meet strict technical requirements and origin standards set by the CPTPP member countries.

The origin of goods and their inputs is a particular challenge set by CPTPP member countries. It comes as inputs used for the production of exports are primarily imported from non-CPTPP member countries, including China and the Republic of Korea. Hence, a shift to the source of inputs in line with CPTPP requirements is an urgent need.

Local garment and textile sector is also faced with the same issue. Garments and textiles traded between CPTPP member countries are likely to enjoy tariff incentives if fibers used for such products are made within the bloc.

This could emerge as a considerable barrier for the local sector since up to 60 per cent of textile inputs and garment materials are imported from non-CPTPP member countries.

Technical requirements for packaging, labeling, and maximum residue limit become additional barriers which could hinder the access of Vietnamese exports to the CPTPP market.

Thach Phuoc Binh, a National Assembly deputy from the southern province of Tra Vinh, said the CPTPP goes beyond traditional tariff cuts as it covers a range of rigid requirements for services, intellectual property, technical barriers, labor, and the environment.

The CPTPP could offer huge opportunities for key Vietnamese exports as well as increases in the country’s overall export turnover. But, for all of the opportunities to be taken, Vietnamese firms need to make further investment in R&D production and build up brand names for their products if they want to approach demanding markets like those within the CPTPP.

Earlier, the MoIT reported in January that the CPTPP has come into force for six member countries, including Mexico, Japan, Singapore, New Zealand, Canada, and Australia from December 30, 2018 onwards.

Japanese brand hunts personnel for first Vietnam store

Japanese casual wear retailer Uniqlo has advertised vacancies for managerial and retail positions in Vietnam.

According to advertisements on Jobstreet.com, a recruitment website, the Japanese corporation is looking for managerial and store level candidates urgently for its first store in Ho Chi Minh City. 

The plan to open its first outlet this fall had also been mentioned in the annual report of Fast Retailing, Uniqlo’s parent company.

Accordingly, Uniqlo registered a domestic company, under the form of a two-member limited company, in Vietnam last October. Fast Retailing owns 75 percent of the joint venture,  while diversified conglomerate Mitsubishi holds the remaining stake. 

The company has a charter capital of $8.8 million, with all of its registered legal representatives: chairman, general director and chief executives being Japanese individuals. 

This is part of Uniqlo's plan to expand its brand globally. Apart from Vietnam, Uniqlo also expects to open its first stores in Denmark, Italy and India this year.

The Nikkei Asian Review has reported that Uniqlo's arrival will intensify competition between foreign brands like Zara and H&M in Vietnam.

According to German research firm Statista, Vietnam's fashion revenue will grow 22.5 percent a year in the 2017-2022 period, reaching $988 million yearly by 2022. 

Vietnam’s revenue from the fashion segment amounted to $486 million in 2017 and $557 million in 2018, and is projected to hit $661 million this year.

Uniqlo aims to have around 400 outlets in Southeast Asia and Oceania by 2022, generating $2.71 billion in revenue.

The brand currently has 827 stores in Japan and 1,241 international stores.

An Phat Holdings becomes second-tier vendor for Samsung

Becoming a second-tier vendor of Samsung is the sweet fruit of more than one year of non-stop efforts to restructure An Phat Holdings, and will become the basis to realise its ambition to become Southeast Asia’s leading high-tech plastics manufacturer.

On March 31, An Trung Industries Joint Stock Company, a subsidiary of An Phat Holdings, signed a contract with Elentec Vietnam Co., Ltd. (which is mobile phone plastic component supplier for Samsung) to become the latter’s second-tier vendor.

According to the contract, An Trung Industries has been supplying plastic components for Elentec since March 2019. These components will be installed on Samsung mobile phones, contributing to bringing “Made in Vietnam” products to customers all over the world.

In order to get this achievement, An Trung Industries had to restructure its operations and invest in technology and human resources in order to meet the strict requirements of its partner on quality, price, and timely delivery. The company invested VND400 billion ($17.4 million) to develop a 13,000 square metre plant with 42 manufacturing lines imported from Japan and South Korea.

Man Chi Trung, general director of An Trung Industries, said, “We had to redouble our efforts to become a vendor of Samsung, which is the world’s leading mobile phone manufacturer with very strict quality requirements.”

The result shows that An Trung Industries’ products satisfy the global standards that Samsung issued for its vendors. It also means that the company’s products are of a similar quality to products manufactured in South Korea, Japan, and Europe.

Cho Chang Hyun, general director of Elentec Vietnam, said, “We highly appreciated An Phat Holdings’ investment in An Trung that enabled An Trung to obtain this achievement.”

At present, An Trung Industries is focusing on manufacturing technical plastic components with a capacity of 9 million products per months. Along with Samsung, the company is a partner to 10 other large-scale enterprises operating in the electronics and power sectors.

The company plans to add coating and plating technology lines in order to meet its partners’ requirements.

In Vietnam, the number of plastic manufacturers is very large. However, most of them specialise in manufacturing household plastic items and only a few enterprises produce plastic to support industrial production due to barriers in investment capital and technology.

Meanwhile, the supporting industry sector appeared in Vietnam over 20 years ago, after multi-national groups like Honda and Toyota opened their first plants and started looking for local vendors in order to save time and expenses.

In reality, more and more enterprises appear on the selection lists of these large groups, especially Samsung, every year, but only a few can make it into the last selection round.

In Samsung’s case, the corporation assigns experts to nominee enterprises to advise and help them to improve their manufacturing capacity and management processes. At the final round, the general director of Samsung will visit the enterprises to decide whether the enterprise can become a vendor. Numerous local enterprises were removed from the final list after they failed to live up to Samsung’s requirements.

Local enterprises have to improve massively to become vendors for large groups, but more and more are willing to try as they see massive gains if they succeed. Notably, they will have the opportunity to receive technology transfer and access to global supply chains. Besides, their brands will be more famous and they will be able to have more large customers.

In An Phat Holdings’ case, the company took advantage of being a leading plastic manufacturer in Vietnam and Southeast Asia to expand its operation. In 2018, the company purchased Hanoi Plastic JSC (HPC) and entered into a co-operation with VinFast to establish VinFast-An Phat (VAPA) Ltd. Besides, the company expanded its investment in An Trung Industries.

Via HPC, An Phat Holdings can take advantage of HPC’s customer base which includes Toyota, Honda, and Piaggio to expand operations. Besides, HPC’s advantage in manufacturing components for automobiles, scooters, and electronic will help An Phat Holdings realise its ambition to set its foot in the supporting industry.

VAPA is a joint venture with VinFast, thus, it will contribute to dealing with the consumption for An Phat Holdings’ products. Finally, An Trung Industries becoming the second-tier vendor of Samsung helped An Phat Holdings affirm its brand in the market, while simultaneously providing an opportunity for the company to continue expanding its operations.

Thus, after reviewing the operations of An Phat Holdings in the past year, it is easy to see that the general strategy of the company in the supporting industry is investing, expanding operations, and expanding its valuation via becoming a vendor for large groups.

Cuong affirmed that An Trung Industries and HPC will be the two “key cards” to help the company establish a solid foothold in the supporting industry.



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