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Vietnam’s industrial production inches up 0.4% in January

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Vietnam’s index of industrial production (IIP) in January fell 9.2% against the previous month and inched up 0.6% year-on-year, according to the General Statistics Office (GSO). 

The manufacturing and processing sector grew by 1.6% compared to the same period last year, while electricity production and distribution increased by 0.4% and water supply, waste management, and treatment activities 9.2%. However, the mining sector experienced a decline of 10.4%.

Forty-seven cities and provinces recorded significant year-over-year growth, with remarkable industrial expansion seen in Nam Dinh province (29.9%), Bac Kan (28.5%), Ben Tre (24.2%), Binh Phuoc (17%), Kien Giang (16.6%), and Hai Phong (16.3%). In the electricity production sector, Tra Vinh stood out with a 56% surge while Khanh Hoa and Binh Thuan documented increases of 30.8% and 20.6%, respectively.

Conversely, Ca Mau experienced a 16.3% decline, followed by Gia Lai at 13.2%, and Ha Tinh at 10.4%. Major economic hubs also struggled with industrial production in the month, with Hanoi dropping 9.8%, Ho Chi Minh City 9.3%, and Da Nang 8.9%.

Key industries showed mixed performance in January. Motor vehicle production surged by 33.8%, while furniture manufacturing increased by 10.6% and leather and related product production 10.3%. The electronics and computer products and food production sector saw modest growth of 3.8% and 2.1%, respectively. However, pharmaceutical production declined by 29.1%, coal mining 20.1%, and electrical equipment production 11.5%.

In terms of specific products, automobile production jumped by 60.7%, television 50.1%, NPK fertiliser 13.7% while natural fiber fabric rose by 9.6% and clothing production 5%.

The number of workers in industrial enterprises posted a 0.2% month-on-month increase, and a 4.5% year-on-year growth as of January 1. Foreign-invested enterprises led employment growth with a 4.9% increase compared to the previous year.

According to Director of the GSO’s Industry and Construction Statistics Department Phi Thi Huong Nga, recent international supply chain shifts present significant opportunities for Vietnam. The country could achieve breakthrough industrial growth in 2025 and beyond by leveraging its advantages and accelerating digital and green transformation as well as meeting the increasingly stringent requirements of the international market.

The electronics and components sector has shown particular promise, while textile and footwear companies have secured orders through the first half of the year, she said, adding the wood processing industry has also shown significant recovery with continued high growth.

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Promoting circular economy in industrial parks

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The benefits of green transformation in industrial parks are both huge and lasting, according to leaders of the Ministry of Planning and Investment. However, in the short term, many challenges and obstacles have meant the transition process has not been as strong as expected.

The Ministry of Planning and Investment and the United Nations Industrial Development Organization (UNIDO) held a conference entitled “Advancing circular economy in Vietnam’s industrial parks for sustainable development” on the afternoon of April 12.

In his opening speech, Le Thanh Quan, Director General of the Department of Economic Zones Management under the Ministry of Planning (MPI), said that in the more than 30 years of establishment and development, industrial and economic zones have been recognised as playing an important role in fostering socio-economic development, accelerating the process of industrialisation and modernisation, and promoting international integration.

Circular economic development is a trend that many countries around the world consider to be the green industrial revolution of the 21st century and is consistent with the country’s development orientation in the coming period. In particular, the eco-industrial park model is seen as the driving force to boost the circular economy.

According to Quan, the benefits of this transformation are great and long-lasting, but in the short term, many obstacles are preventing the transformation process from taking place as strongly as expected.

Smail Alhilali, Industrial Development Officer at the Department of Environment, UNIDO, said: “Promoting circular economy in industrial zones can help Vietnam to not only reduce environmental impacts but also create opportunities for innovation and green growth.”

Vietnam has a lot of potential. With existing support and available directions, Vietnam should learn from previous countries and successfully implement digital and energy transformation. The country should not only focusing on cleaner production and reduced emissions but also address the consumption issues.

The conference included discussion sessions on the important role of industrial parks in implementing circular economy principles, the opportunities and challenges of integrating circular economy activities between different industries in industrial parks, and others.

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Foreign offshore wind power investors can sell projects, Vietnam SOEs prioritized to buy

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Foreign investors of offshore wind power projects in Vietnam can sell their projects, and wholly state-owned enterprises (SOEs) or subsidiaries of those SOEs are prioritized to buy them.

The transaction is only permitted if the Vietnamese investors in the company refuse to purchase, according to the government’s Decree 58/2025 on renewable and new energy, effective from March 3, 2025.

Transactions of a part of an offshore wind project or an entire project must comply with the Electricity Law 2024 and other laws related to investment, enterprises, and sea.

They must be approved by the Ministry of National Defense, the Ministry of Public Security, the Ministry of Foreign Affairs, and the Ministry of Industry and Trade if there is involvement of foreign investors.

A sea-based wind power project in Tra Vinh province, Mekong Delta, southern Vietnam. Photo courtesy of Trungnam Group.

A sea-based wind power project in Tra Vinh province, Mekong Delta, southern Vietnam. Photo courtesy of Trungnam Group.

In cases of not-yet operational projects, the foreign buyers must meet the following requirements.

First, they must have experience in investing and developing at least one offshore wind power project that is operational in Vietnam or in the world. “Experience” includes direct investment, contributing a minimum 15% of the project’s total investment capital, and the ratio of equity to capital contribution being at least 20%.

Second, the foreign buyers must ensure that the offshore wind power project has the participation of domestic enterprises with at least 5% of chartered capital or voting shares of the company that implements such projects. The “domestic enterprises” must be wholly state-owned enterprises (SOEs) or firms with SOEs holding more than a 50% stake.

Third, they must commit to utilizing domestic supplies (workforce, service, products) during their investment, construction and operation, on the basis of ensuring competitiveness of prices, quality, schedule, and available capability.

For operational projects, the transations must meet the “second” requirement mentioned above.

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Law on national defence, security industry, industrial mobilisation passed

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The 15th National Assembly (NA) on June 27 passed the law on national defence-security industry and industrial mobilisation in its ongoing seventh plenary session.

Specifically, all the 464 deputies present in the sitting, or 95.47% of the total number of deputies, said “yes” to the law.

The law comprises seven chapters and 86 articles.

Article 80 in the draft law proposed earlier about the responsibilities of People’s Court was removed, while Article 28 was added on the development of technologies with dual purposes and Article 71 on training, research, and expert exchanges to serve defence-security industry.

The law will take effects from July 1, 2025.

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