Vietnam Market Watch: Quang Ninh Industrial Complex Approved, Manufacturing Growth, and Alchohol Exports

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Seaport, Industrial Complex in Quang Ninh approved

Vietnam’s Prime Minister approved the development of a seaport and industrial park complex in the Nha Mac marsh area in Quang Yen town, Quang Ninh province. Investors include three companies from the Cayman Islands, Singapore and Hong Kong. The project will be spread out over 1,193 hectares and will cost US$310 million (6,940 billion VND). The construction of the project is expected to start in 2017 and will be divided into three phases with the final phase completed in 2021.

Officials stated that the complex has a good location as it’s located near the Dinh Vu-Cat Hai Economic Zone and Haiphong’s Cat Bi International Airport. The government wants the complex to be a high-tech seaport creating around 110,000 jobs and contributing US$10.7 million (240 billion VND) to the province’s budget per year. Average revenue is expected to be US$45.6 million per year with a net profit of US$17.4 million per year. Investors have also been asked to make an environmental report by the authorities.

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Alcohol Exports to be Reduced

The Ministry of Industry and Trade in its new plan to 2025 aims to reduce the percentage of alcohol and beer products for exports, while increasing non-alcoholic beverage products. In its vision it plans to increase the production of non-alcoholic beverages doubling it to 15.2 billion liters between the 2020-35 period. Beer plants that produce below 50 million liters per year will be discouraged. Beer production is expected to reach 4.1 billion liters by 2020, 4.6 billion by 2025 and 5.5 billion liters by 2035.

Export revenue is expected to double from US$450 million to US$900 million between 2020 and 2035. The government wants to focus on applying technology to improve product quality, diversify products while building brand names. In addition, the governments wants to encourage private investment in the non-alcoholic beverage sector. Officials stated that they would need around US$1.2 billion worth of investment in the next four years.

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Manufacturing Shows strong Growth

The Nikkei Vietnam Manufacturing Purchasing Managers’ Index or PMI shows strong growth of 52.2 in August compared to 51.9 in July. A reading of 50 and above indicates economic expansion while below that indicates a contraction. However analysts stated that while the data is positive, output and orders increased at weaker rates, suggesting that demand is showing signs of saturation. Nevertheless, the manufacturing industry has consistently strengthened in the past nine months.

While investment goods producers showed a rise in production, output dipped in the consumer and intermediate goods sectors. Employment was also boosted in August helping to reduce the backlog of manufacturing work. Manufactures also continued to lower their output prices in August by offering discounts to get new business. The results while mixed, show that manufacturing will continue to contribute to the GDP which is expected to grow at 5.85 percent in 2016.


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