Industry and Trade Press Review dated June 27, 2017
1. The Coal Industry Paradox
- Inventory vs. Imports: Vietnam is currently facing a contradiction where domestic coal is in surplus (nearly 10 million tons in stock) while imports continue to rise sharply.
- Pricing Issues: Since 2015, domestic coal prices have become higher than global prices due to high extraction costs. Consequently, EVN (Electricity Vietnam) has reduced domestic purchases to favor cheaper imports and focus on clearing debts with Vinacomin.
2. Energy and Petroleum Insights
- Fuel Shortage Forecast: Vietnam will continue to import refined petroleum over the next five years. Domestic supply from the Dung Quat and Nghi Son refineries is expected to cover only 82%–92% of the demand, leaving a deficit of approximately 0.8 million tons of gasoline and 1.8 million tons of DO annually.
- Russia-Vietnam Cooperation: PV Drilling signed a $42 million contract with a subsidiary of Russia’s Rosneft to provide drilling rigs and technical services for a three-month campaign.
- Electricity Monitoring: Following a heatwave in early June, EVN Hanoi is auditing electricity bills to ensure accuracy after a surge in consumer usage.
3. Export Growth and New Markets
- Surging Exports: In the first five months of 2017, export turnover grew more than twice as fast as in the same period of 2016, with strong performance in agriculture, seafood, and minerals.
- FDI Dominance: The FDI (Foreign Direct Investment) sector continues to show higher growth rates than domestic enterprises in terms of export value.
- Market Expansion:
- Japan has officially permitted the import of Vietnamese poultry for the first time.
- Australia is expected to open its market to fresh Vietnamese dragon fruit within 2017.
4. Macroeconomics and Industry 4.0
- Economic Strategy: Vietnam is focusing on financial policies to leverage the Industry 4.0 revolution, utilizing Big Data and Cloud Computing to develop domestic industry.
- Growth Quality: While GDP growth has averaged 6.4% since 2000 and poverty has dropped significantly, experts emphasize the need to re-evaluate the quality and sustainability of this growth model.
5. Administrative Bottlenecks and Inspections
- Specialized Inspections: This remains a major hurdle, accounting for 72% of total customs clearance time, while actual customs procedures only take 28%.
- Inefficiency: Despite high inspection rates (30% of shipments), the failure rate is less than 1%, leading to calls for reducing pre-clearance inspections and moving toward self-certification for businesses.
6. Domestic Market and Agricultural Challenges
- “Rescue” Crises: Multiple agricultural products, including bananas, cassava, and pepper, are facing price collapses or disease outbreaks, requiring urgent market organization reforms.
- Brand Performance: Eleven Vietnamese brands made it into the Top 1,000 Brands in Asia; however, most have dropped in rank compared to 2016.
- Industrial Movements: Global fast-fashion giants like Zara, H&M, and Uniqlo are intensifying their presence, creating fierce competition for local Vietnamese fashion brands.
