Transportation Costs and Risk Exposure

On April 14, 2020, the Prime Minister issued Directive 18/2020/CT-TT on Vietnam’s socio-economic development plan for the period of 2021-2025. The Directive summarizes the results achieved during period of 2016-2020 and sets development goals for the period of 2021-2025.

The Directive identifies the results achieved in the period of 2016-2020, along with focusing on analyzing the quality of economic growth, implementing restructuring of each industry, each field and development competitiveness of each region.

In addition, the goal in the period of 2021-2025 is to improve labor productivity, competitiveness, improve business environment, support and develop businesses, create new business environment applying information technology, increase production capacity. Accordingly, set a common goal of achieving the country’s average economic growth rate from 5 years from 2021 to 2025 by about 7%, but agencies and localities depending on the actual situation to make their appropriate growth. In addition, the Directive also clearly stipulates the target of average GDP in this period is 3,200-3,500 USD/person, in which the proportion of industry and services in GDP by the end of the period reaches 85%, the rate of trained labor reaches 65-70%.

Regarding the direction of social development, the Directive plans to complete a number of projects such as the project “Strengthening the capacity of arbitration in resolving trade and investment disputes in service of international integration”, Project “Promoting cashless payment for the period 2016-2020”, Project on “Developing Vietnam’s environmental industry to 2025”, “Project on domestic coordination mechanisms to solve problems environment in Free Trade Agreements (FTA)”.

In addition, the Directive also sets out the goal of promoting the construction of synchronous infrastructure such as transportation, seaports, energy, information and communication technology, urban areas, agriculture, etc. develop urban areas in line with the trend of smart, green, environmentally friendly urban centers, adapting to climate change, focusing on improving urban quality.

With the goals achieved in the period of 2016-2020 and the goals were set in the period of 2021-2025, Vietnam hopes to achieve the socio-economic benefits set out in order to further develop the country, bringing development life to all aspects and bringing Vietnam to compete with other countries in the world.

According to Chairman of Quang Binh Provincial People’s Committee – Mr Nguyen Huu Hoai, the provincial People’s Committee has just issued a decision to call for investment in 48 projects in the fields of industry, agriculture, tourism, services and trade… in the period from 2018 to 2020.

Accordingly, the People’s Committee of Quang Binh province has approved the list of projects calling for investment with the total capital of more than 50,000 billion VND in the period of 2018 – 2020. The decision was issued by the province on June 5th, listing 48 projects calling for investment with a total land area of 8,000 hectares.

In the above 48 projects, there are 17 projects in the field of tourism, services and trade: including 6 coastal resort projects, 8 ecological resort projects, 3 commercial center projects, with a total investment of over 37,000 billion VND, the land area for the projects is over 1,500 ha. For such projects as tourism complex, coastal resort and ecotourism and resort complex, Quang Binh province has paid special attention to and dedicated the land fund for each project up to hundreds of hectares.

In the field of industry, Quang Binh province has listed 5 projects calling for investment, including: Quang Binh wind power development; Quang Binh solar power development; factory manufacturing and assembling electrical appliances, electronics, telecommunications and industry; factory producing energy saving lighting equipment and factory producing components and assembling cars… with the total investment capital of over 8,000 billion VND.

In addition, Quang Binh province also approved invitations to invest in 8 agricultural projects; 3 projects in the field of health and training; 8 residential and urban infrastructure projects and 5 industrial zone infrastructure projects. These projects are highly valued to attract investors to this locality.

According to the head of the Quang Binh Government, together with the approval of the plan to call for investment in the period 2018 – 2020, Quang Binh province also strengthens the direction of the functional units, localities in the province to urgently build content of project information. Quang Binh province is committed to providing the best support to investors when coming to this locality based on the available resources that Quang Binh is considered to be very rich.

Phu Yen is gradually moving its economic structure from a purely agricultural province to industry, tourism and services. In order to achieve this goal, thousands of hectares of industrial parks have been prepared, along with infrastructure investment with full facilities to attract projects and foreign investor to invest in Vietnam and in Phu Yen province.

In May 1974, at the An Phu Industrial Zone in Tuy Hoa, Phu Yen province, the electronic component factory was kicked off, marking the presence of the high-tech industry in Phu Yen. This is the first electronic component factory to be built in Phu Yen, with capacity of 500 million pieces per year, with such main products as RF coils and electromagnets. Total investment for the factory is over 5.7 million USD, 100% of products will be exported. The establishment of a factory in Phu Yen province is part of Coilcraft Corporation’s production development in Asia.

Vice Chairman of Phu Yen People’s Committee welcomed the Coilcraft Corporation for investing in Phu Yen, contributing significantly to the socio-economic development and the industrialization and modernization process of the province. At the same time, it is suggested that the Management Board of Phu Yen Economic Zone and investors continue to have connections and promote the industrial potential of Phu Yen to other investors.

The appearance of electronic component factory invested in An Phu Industrial Park, besides the glass production factories of Hoang Hai Trading Co., Tan Phat Canned Food Joint Stock Company and the project of CCIPY Vietnam limited liability company., as well as bottled water , soft water plants, and seafood processing plants (in Hoa Hiep 1 Industrial Park) of Xin Bang Co., Ltd have made the investment situation in Phu Yen’s industrial zones more diverse and exciting.

Besides implementing the policy of economic restructuring towards industrialization, the Party and Phu Yen authorities have made many appropriate policies in order to mobilize internal resources in the province and attract foreign investment. At the same time, completing investment in infrastructure of approved industrial zones and clusters; promote the efficiency of investment and the role of industrial zones and clusters in economic restructuring of the industry, contributing to the economic restructuring of the province.

Currently, Phu Yen province plans to build industrial parks, attracting hundreds of investment projects. In particular, it is concentrated in Hoa Hiep 1 Industrial Park, Hoa Hiep 2, An Phu, North East Song Cau 1 and North East Song Cau 2.

One of the favorable conditions for the management board of Phu Yen economic zone to carry out the plans of promoting and attracting investment in line with the industries and sectors in the industrial parks. That is Phu Yen Provincial Industrial Development Plan up to 2020, with vision to 2030, which has been approved by the provincial People’s Committee.

The plan identifies groups of industries with priority given to development till 2020 with a vision to 2030, including: processing of agricultural, forest and aquatic products; medicine; textile; products from new technology; software industry and digital content; chemistry; energy; electronic equipment, telecommunications equipment and information technology; mechanical engineering; supporting industry.

Opportunities are opening for Vietnam to attract more foreign direct investment (FDI) flows from France.

As planned, during the visit to Vietnam of French Prime Minister Edouard Philippe (from November 2nd – 4th), in the afternoon of November 2nd, a series of new cooperation agreements were signed between enterprises of the two countries, to promote bilateral trade and investment cooperation. On November 4th, a business forum will also be held in Ho Chi Minh City, attracting the participation of about 200 businesses from Vietnam and France.

These moves are promising to open new opportunities for cooperation between the two countries’ businesses, which are believed to have great potentials and are on the rise. In fact, in March 2018, after a visit to France of General Secretary Nguyen Phu Trong, a series of new cooperation agreements were signed. Among them, there is an agreement between the T&T Group and the Bouygues Group (France) on investment cooperation of the no.3 urban railway project in Hanoi, with total investment estimated at 1.4 billion USD. The two Groups also signed an agreement on the BT contract (build – transfer) of a project to connect Ha Noi with Son Tay town (Nhon – Troi – Phung – Ring road 4 – Son Tay), cooperate to invest and develop the project of upgrading and expanding Hang Day Stadium…

In addition, there are cooperation contracts between Vietnam Airlines with Air France, Tre Viet (Bamboo Airlines) with Airbus…

In fact, there have been more positive trends in French investment into Vietnam since the beginning of this year. According to data released by the Foreign Investment Agency (Ministry of Planning and Investment), in the first 10 months of this year, French businesses have registered to invest 517 million USD in Vietnam.

France currently ranks in the Top 10 countries and territories with large investments in Vietnam, even ranks 1st among European investors have invested in Vietnam since the beginning of this year. If calculated cumulatively, France has invested in Vietnam 3.6 billion USD, surpassed UK.

When Prime Minister Nguyen Xuan Phuc was on a trip to Europe, the European Commission (EC) agreed to submit to the European Council for approval to officially sign the European – Vietnam free trade agreement (EVFTA), expected by the end of 2018, then submitted to the European Parliament for approval, scheduled for early 2019. Once this agreement has been formally adopted, a new door to promoting EU – Vietnam trade and investment will be opened. In this context, investment flows from France are also expected to grow strongly.

At the present, most French investment projects in Vietnam are implemented in the early stages of FDI attraction, such as BNP Paribas, Total, Schneider Electric, Renault, Technip…

Recently, some French investors started to increase their investment in Vietnam. Typical is Auchan with plan to invest 500 million USD to open retail system in Vietnam. Or Schneider Electric, with the inauguration of a new factory in Ho Chi Minh City, with 45 million USD investment capital in Phase I in 2017. In addition, Sanofi has 3 factories in Ho Chi Minh City…

Newer names, such as In Vivo and Olmix, are also boosting their investments in agriculture in Vietnam. EDF Group has been licensed to participate in Son My 1 Gas Power Project. In addition, Saint-Gobain is building a factory in Hai Phong city; Veolia, Suez and Vinci are actively pursuing water treatment projects.

In a series of large foreign investors in Vietnam, especially Korean investors, the public often refers only to big names such as LG, Samsung…, but not many people knows that Hyosung has invested billions of dollars in Vietnam.

Few days ago, the People’s Committee of Quang Nam province has officially approved the report on the environmental impact assessment of Hyosung’s cloth curtain factory in Tam Thang Industrial Park. This is an important move for Hyosung to soon receive investment registration certificate as well as to implement the project with expected investment capital of 1.34 billion USD.

In October 2018, Hyosung was awarded by the Chairman of the People’s Committee of Quang Nam province an investment plan for the project that they have started to pursue since 2015, in order to expand the market in the central region.

If the project of Hyosung in Quang Nam is soon granted investment registration certificate, it is likely that this Korean corporation will become a foreign investor registering to invest up to 2 billion USD projects in Vietnam this year.

By the end of May 2018, Hyosung invested the Polypropylene (PP) manufacturing factory and liquefied petroleum gas (LPG) storage tank in Ba Ria – Vung Tau with investment capital of over 1.2 billion USD. As planned, Hyosung will build a liquefied petroleum gas storage tank with capacity of 240,000 tons in Cai Mep area and use this liquefied petroleum gas to produce polypropylene, ethylene, propylene…

The factory is expected to be built within two years, completed and put into operation by the end of 2020, attracting about 2,000 laborers and contributing to the state budget of about 80 million USD per year.

Thus, this year, Hyosung has committed to invest in Vietnam of more than 2.5 billion USD.

According to Hyosung’s representative, Hyosung has plan to raise investment capital in Vietnam to 6 billion USD and investment fields will include chemical industry, heavy industry and power projects. Hyosung is very interested in power projects in Vietnam, especially the supply of transformers that the Vietnamese market is in great demand.

Like other major Korean corporations, such as Samsung, LG, SK…, Hyosung is gradually turning Vietnam into a major manufacturing base and becoming one of the most attractive investment destinations in the region. If the plan to increase investment capital to 6 billion USD becomes reality, Hyosung will become one of the largest foreign investors in Vietnam.

In the international conference “Investing in Sustainable Urbanization” organized by Danang People’s Committee in collaboration with the regional network of local authorities on human capital management (CityNet), Da Nang has called for investment in 7 strategic projects.

At the workshop, Danang People’s Committee announced the list of 7 projects calling for investment in the form of PPP (public-private partnership): Lien Chieu port; solid waste treatment complex; new railway station and integrated urban area; infrastructure development and technology for non-motorized transport solutions; Da Nang – Hoi An metro; smart city construction and industrial park construction projects.

In particular, the project of Lien Chieu port is calling for investment with the aim of becoming the main wharf of the international gateway to the Central region, accommodating ships up to 100,000 tons. The relocation and construction of Da Nang Railway Station calls for investors to pay attention and implement the project in the form of PPP, which might be through BOT contract.

Da Nang Integrated Urban Renovation Project has a total budget of more than 345 million USD (over 7,900 billion VND). Project on development of vehicles and application of smart traffic management system in the form of ODA or PPP with a total capital of about 3.300 billion VND. The project to build metro connecting Da Nang with Hoi An city (Quang Nam) with a length of 33 km, along the coastal road, this project needs funding from 7,000 to 14,000 billion VND.

According to the Vice Chairman of Danang People’s Committee, sustainable urban development is one of the priorities of the city. Da Nang has set the orientation and guidelines for sustainable development. Since 2014, the city has approved a smarter city plan with priority areas of transportation, water supply, sewerage, food safety and building better city connections. Hence, Da Nang calling for investment in 7 key projects to address sustainable issues related to transport, urban.

Mr Vijay Jagannathan, Secretary General, of CityNet said that the workshop “Investing in Sustainable Urbanization” in Da Nang is seeking financial investment in urban infrastructure in a sustainable manner, overall and resistant to climate change. He also emphasized that infrastructure is a major challenge for urbanization as demand grows. Urban communities depend largely on effective urban planning as well as access to affordable public services.