Vietnam Industry and Trade News Bulletin for March 16, 2020

A. GENERAL ECONOMIC NEWS AND COVID-19 IMPACT

1. COVID-19 Challenges to Industrial Production and Logistics

• Manufacturing Struggles: Enterprises like May 10 (Textiles) face revenue drops, supply chain disruptions, and the pressure of short-term interest rates while customer demand shifts.

• Sector-Specific Issues: TKV (Coal and Minerals) is affected by its heavy dependence on the Chinese market and a shortage of Chinese experts for mining projects. PVN (Oil and Gas) faces revenue losses as global crude oil prices plummet.

• Logistics Downturn: Around 15% of logistics firms estimate a 50% revenue decrease. Cargo transport volume growth has slowed significantly compared to 2019.

• Business Strategies: Many businesses, such as those in Thua Thien Hue, are forced to adopt “austerity” measures, cutting costs to survive the pandemic.

2. Investment, Finance, and Budget

• Foreign Investment: In the first two months of 2020, the US led 12 countries receiving investment from Vietnam (65.2% share). Conversely, Singapore was the largest investor into Vietnam, accounting for 82.2% of newly registered capital.

• Budget Stability: Despite falling oil prices, the state budget remained stable in early 2020 due to payment lags; however, experts warn of potential decreases in special consumption taxes.

• Capital Market: The market faces high volatility with plunging stock indices and surging gold prices due to global economic stagnation.

• Labor: Unemployment insurance claims have increased, though this also reflects an annual trend of rising participation in the insurance system.

3. E-commerce and Digital Economy

• Domestic Resilience: Local platforms like Tiki, Sendo, and The Gioi Di Dong are successfully competing against regional giants Shopee and Lazada. Vietnam leads the region in the traffic share of domestic e-commerce companies at 66%.

• Potential Merger: Rumors of a Tiki-Sendo merger suggest a strategic move to combine urban and rural strengths to rival international competitors.

• Digital Governance: The Prime Minister praised the Ministry of Industry and Trade (MoIT) for its efficient operation of the Government Reporting Information System, which saves costs and prevents corruption.

B. INDUSTRY AND TRADE NEWS

I. ENERGY (ELECTRICITY, OIL, AND GAS)

1. Electricity Management and Safety

• Price Concerns in Phu Tho: Residents in Thach Khoan expressed outrage over a sudden spike in electricity bills; local authorities are investigating meter accuracy and discussing the transfer of management from cooperatives to the state grid.

• Infrastructure Risks: Experts warn of safety risks in rural/mountainous grids due to temporary poles and tangled wires. EVNHCMC also issued warnings about kite-flying causing power outages and fires.

• Corporate Planning: Pha Lai Thermal Power (PPC) set a 2020 target for 6.2 billion kWh but expects a 56% decrease in pre-tax profit compared to 2019.

2. Petroleum and Global Oil Market

• Significant Price Drop: On March 15, 2020, fuel prices were sharply reduced (E5RON92 down by 2,290 VND/liter) to support citizens and businesses during the pandemic.

• International Tensions: An “oil price war” has emerged between OPEC (led by Saudi Arabia) and non-OPEC countries (led by Russia) after failing to agree on supply cuts.

• Refining Trends: Japanese refineries are maintaining high operation capacities despite a 25% drop in product sales and an 80% plunge in jet fuel demand.

II. IMPORT AND EXPORT

1. Export Shifts and Performance

• Market Diversification: MoIT is encouraging a shift from direct to indirect exports via global distribution chains and e-commerce to mitigate COVID-19 impacts.

• Agricultural Success: For the first time in over a year, rice export prices exceeded $400/ton due to high demand for stockpiling in the Philippines and Malaysia.

• Electronics Growth: Despite the pandemic, electronics exports to China grew strongly, reaching nearly $5.5 billion in the first two months.

• Seafood Challenges: Seafood exports dropped 15.9% in early 2020, with massive declines in the Chinese, Korean, and US markets. Frozen and canned products are expected to outperform fresh products due to changing consumer habits.

III. DOMESTIC MARKET AND MANAGEMENT

1. Essential Goods and Pandemic Response

• Food Supply: Supermarkets (Saigon Co.op, etc.) are increasing home delivery services via phone and apps to avoid crowds.

• Pork Market: Pork prices remain high (82,000–85,000 VND/kg in the North), exceeding government targets. Authorities recently seized 97 pigs illegally transported from Laos.

• Market Control: Lạng Sơn and other provinces are cracking down on traders who hoard goods or increase prices of essential items like instant noodles and canned food.

2. Automotive Market

• Import Trends: Passenger car imports from Thailand and Indonesia surged significantly in early 2020.

• Struggling Sales: Both new and used car markets are quiet despite heavy discounts and promotions, as consumer income and demand have been hit by the pandemic.

IV. MANUFACTURING (HEAVY AND LIGHT INDUSTRY)

1. Medical Supplies Production

• Face Mask Supply: Vietnam aims to provide 30 million masks in March. Vinatex has successfully launched anti-droplet and antibacterial 3-layer cloth masks priced at 70,000 VND per box of five.

2. Industrial Projects

• Mining and Bauxite: The Tan Rai Bauxite Project is strictly following environmental restoration protocols, having replanted over 80 hectares of forest after mining.

C. CORPORATE UPDATES

• TKV: Successfully divested 100% of its shares at Nghe Tinh Non-Ferrous Metals JSC for over 61.5 billion VND. The group also launched emulation movements to celebrate the Party Congress.

• PV GAS: Promoted a culture of innovation, resulting in “million-dollar” technical initiatives.

• Vinatex: Donated 5,000 antibacterial masks to the Central Eye Hospital and held the Party Congress for its Hanoi office, focusing on sustainable development and high-quality personnel.