Business in brief 03/08/2009
Toshiba Corp., Japan’s largest atomic-reactor maker, and Sojitz Corp. won an 11-billion-yen (USD115 million) contract to supply generators to Vietnam, tapping growing demand in the country. The Japanese companies will supply the two 600-megawatt steam-turbine generators to a coal-fired power plant owned by Vietnam Machinery Installation Corp., Tokyo-based Toshiba said in an e-mailed statement on Friday. The power station, in the country’s north, will start operations in 2012, it said. Equipment manufacturers are competing for contracts from Vietnam as the country’s power demand grows along with its economy, which the government has said may expand by 5.5 percent this year. The country plans to more than triple coal-fired power generation to add 30,000 megawatts capacity by 2015, according to Toshiba.
Local coffee company Thai Hoa signed a consultation contract Friday (31 July 2009) with US partner Smith Coffee to develop a chain of cafes in Vietnam. The USD10 million-project would be geared toward building a high added-value retail trademark, according to the company. Thai Hoa also signed on Friday a cooperation contract with two businessmen from New Zealand to develop an organic coffee project in Vietnam. The project will develop thousands of hectares of organic coffee in Vietnam and Laos, providing materials for Thai Hoa’s cafes and for export, said the company. The project’s first phase envisions 3,000 hectares of organic coffee trees in Laos’s Champasak province. Vietnam, the world’s second biggest coffee producer, shipped 802,000 tons of coffee abroad worth nearly $1.2 billion in the first seven months of the year, up 19.1% in volume, but down 15.7% in value, according to the General Statistics Office.
The Japanese Government plans to provide a loan of between 150-200 million USD to support Vietnam’s economic stimulus packages in the context of the global economic crisis. Nguyen Xuan Tien, Vice Head of the Department for External Economy under the Ministry of Planning and Investment, told the Tuoi Tre (Youth) newspaper, that the two sides are conducting negotiations on the loan, which is part of the Japanese Government’s 3 billion USD emergency aid package for Asian countries to help them cope with the global crisis. Tien said an agreement on the loan is expected to be signed by the end of this year. The newspaper also cited the Department for External Economy source that another agreement on Japanese loan worth 10-15 billion JPY (100-150 million USD) is expected to be signed in early 2010 to assist Vietnam’s program to cope with climate change.
Two Vietnamese companies have won the International Asia-Pacific Quality Award (IAPQA) 2009, reported the Directorate for Standards, Metrology and Quality. The Vietnam Electric Cable Corporation (Cadivi) bagged the World Class Award for Large Manufacturing Organization, and the Materials-Petroleum Joint Stock Company (Comeco) brought home the Best in Class Award for Large Service Organization. This year marks the first time a Vietnamese business has won the first prize of the IAPQA since the country joined the award in 2000. An award presentation ceremony will be organized in Mexico in October on the sidelines of the 15th conference of the Asia -Pacific Quality Organization (APQO).
The Song Thu Company, under the Ministry of Defense, launched a multipurpose rescue vessel on July the 31st in the central coastal city of Da Nang. The 3,500 horsepower ship, designed by the Netherlands’ Damen Shipyards Group, can operate in a fire fighting, search and rescue or oil spill protection role and remain at sea for 30 days without needing to refuel. The vessel, named Sosrcem, has an automated system that can scoop up oil slicks, which replaces the traditional method of using floating barriers to contain oil spills. The Sosrcem, which is 52m in length, 12m wide and 5.5m high, was built at a cost of 300 billion VND (16.8 million USD), is the most modern ship of its class in Southeast Asia. Between its priority duties, the vessel will operate as a freighter, carrying materials and processed oil products to and from the local Dung Quat oil refinery.
Vietnam would remain an attractive destination for retail investment until 2012, said a US market research company, citing the country’s strong GDP growth, regulatory structure changes favoring foreign investors and increasing consumer demand for modern retail concepts. According to US-based market research consulting services company RNCOS, rapid growth in Vietnam’s retail market in the recent past has made the country an attractive destination for multinational retailers. Vietnam Retail Analysis (2008-2012), a research report from RNCOS, also said that the retail sector market in Vietnam was much smaller compared to other developing economies in Asia, but had shown strong fundamentals, with the value of retail sales having expanded rapidly to nearly USD39 billion in 2008, from around USD23.7 billion in 2005. The RNCOS predicted that Vietnam’s retail industry would surpass USD85 billion in revenue by 2012 and modern retail channels are expected to play a crucial role in the future growth of the industry, improving their position in the market.
Vietnam financial department previously issued the notice of No. 93, intended to impose 10% tariffs on the imported alloy steel. Since this year, thousands tons of imported steel containing boron from China declared at customers as the raw materials using in machine manufacturing, enjoyed no imported tax, but most steels use in construction. According to the rules, the import tax on construction steel is 12%. Therefore, Vietnam financial department issued the No. 93 Notice, aiming at increasing the import tariffs on the alloy steel to 10% and enterprises can enjoy non-tariff by providing the survey report on the alloy steel.
The Dong Tam Joint Stock Co has deployed the Oracle E-Business Suite with the support of the FPT Information Systems Company, an Oracle Partner Network in Vietnam. The deployment process was divided into two stages and carried out by a professional team of 25 members in 43 places around the country, including 11 factories and 20 kinds of construction materials and interior decor products. "This project helps all of our employees and managers to receive faster feedback on operation results and make proper decisions," said Etienne Laude, CEO of Dong Tam Con. The new solution will allow Dong Tam to optimize materials planning with accurate analysis of orders and demand forecasts. It will also minimize materials management for manufacturing and storage, as well as effectively control the purchasing and goods receiving process.
An Duc Advertising Company has become the official agent in Vietnam for MIPIM Asia, the organizer of the Asia-Pacific region’s major real estate summit and exhibition. The local firm will be responsible for all product sales and processing of details related to the MIPIM 2009 Real Estate Fair in November in Hong Kong. MIPIM’s annual real estate fair is a marketplace to introduce developing real estate projects and an opportunity to reach strategic investment agreements with international investors and real estate and construction groups. Last year’s event attracted more than 900 corporate participants and more than 2,000 visitors from nearly 50 countries. An Duc will facilitate planning and design for companies in Vietnam wishing to join the world’s top real estate event.
SEAF Blue Waters Growth Fund (SEAF BWGF) has invested VND30 billion (USD 1.69 million) in convertible bonds in the Hoa Binh Co (HBC). The HBC is the official distributor of electrical power products for Honda, Kubota and other internationally recognized brands. It is also a leading assembler and distributor of generators and agricultural and construction equipment. The company will use the proceeds of the convertible bonds to support its core business dealing in internationally-recognized brands, and to expand its own distribution and retail network as well as its original line of products for domestic and international sales. Since the company started its business in 1989, it has developed a distribution network of four branches and 190 dealers nationwide. It saw sales grow 64 per cent between 2007 and 2008 to USD17.9 million. After-tax profit in 2008 was USD1.97 million.
BBV Vietnam S.E.A. Acquisition Corp. announced today that it has signed a non-binding letter of intent with Migami, Inc. to enter into a business combination. Pursuant to the provisions of the Company’s Articles of Incorporation, the Company now has until February 13, 2010 to complete the business combination. If the Company is unable to complete the business combination by February 13, 2010, it must liquidate or it can seek shareholder approval to extend the time period to complete a business combination to February 13, 2011. "We are delighted to have entered into a letter of intent with BBV Vietnam S.E.A. Acquisition Corp and are very much looking forward to working with BBV and its industry contacts in order to help Migami accelerate the growth of its business and achieve its strategic goals," stated John Park, Chairman and CEO of Migami.
Nineteen correspondents from 13 international travel magazines will visit Vietnam starting August 5 to write about the country, the Ministry of Culture, Sports and Tourism said. Their tour will begin in Ho Chi Minh City and wind upward to Nha Trang, Hoi An, Da Nang, Hanoi, and Ha Long Bay. The visitors will go to some of the most popular sites and also get a crash course in the country’s culture, lifestyles, cuisines, handicrafts, and fine arts.
Australia & New Zealand Banking Group Ltd. will pay about A$1.1 billion (USD 920 million) to buy branches in six Asian countries from Royal Bank of Scotland Plc, the Australian Financial Review reported. The assets include bank branches in the Philippines, Hong Kong, Singapore, Taiwan, Indonesia and Vietnam, the newspaper said, citing unidentified people close to the matter. The deal may close as early as Aug. 3, the newspaper reported. “Discussions with RBS regarding selected assets in Asia are continuing and progressing well,” Paul Edwards, a spokesman for Melbourne-based ANZ told Bloomberg News. He declined to comment on specific operations ANZ may be interested in. “There’s no agreement been reached at this stage.”
Turkey will conduct an antidumping investigation involving air-conditioner makers from Vietnam, the Philippines, Egypt, Pakistan and Indonesia, Vietnam’s trade office in Istanbul said. The office said Foreign Trade Affairs of Turkey had made the decision on requests from Turkish firms which asked for expanded investigation and punitive measures on the products imported from the above-mentioned countries, alleging the products were sold at unfair prices like those from China. The Turkish government has since 2006 levied a 25 percent antidumping tax on Chinese air-conditioners, with over USD30 million collected since, according to the office. It said Turkish authorities would collect information about the products and related makers within five weeks. Turkey levied a tax of USD4.55 per kilogram on transmission belts in 2007 and 29-49 percent tax in 2004 on lighters imported from Vietnam.
Tong Yang-HPT Hightech Company and Petro-Vietnam Securities will install trading software to support securities business. The software, which includes back-office, home trading and web trading systems, can handle 20 orders a second and would help local securities companies automate trading processes. The back-office system helps load 100,000 orders daily while the home trading and web trading systems can service 3,000 clients and 8,000 clients respectively. The system allows clients to make stock analyses with technical charts and indicators to real-time trading data from stock exchanges. The system will initially connect to the HCM City Stock Exchange’s remote trading system, as well as to Vietcombank, BIDV and DongA Bank on accounts management. The new service is scheduled to start on October 28.
Tien Giang Province has established agricultural and aquatic zones in recent years to supply raw materials for processing and export, an official said. Nguyen Van Khang, director of the local Department of Agriculture and Rural Development, said special varieties of rice, high-value fruit, safe vegetables, and tra catfish are farmed in these zones. Rice cultivation leads the way with more than 60,000 ha in Cai Lay, Cai Be and Cho Gao districts growing special grain varieties for export. The province grows 1.2 million tons of rice a year and exports 200,000-250,000 tons, according to the department. The province, which leads the country in fruit cultivation, is developing seven speciality fruits of high economic value, including Hoa Loc mango, Tan Phuoc pineapple, Vinh Kim star apple, and Cho Gao dragronfruit, on 70,000ha, producing 800,000 tons annually. Under a plan to develop speciality fruits, the province targets increasing the cultivated area to 90,000ha next year and to 100,000ha in 2020.
Vietnam Italy Steel Joint Stock Co has announced to gain accumulative production output of 108,600 tons of finished products, bringing in VND 884.878 billion in revenue and VND 130.096 billion in profit. In which, in Q2 only, the company reached profit of about VND 120 billion. VIS’s impressive increase in Q2 profit resulted from the considerable rise of steel price recently. According to the company’s resolution in the annual shareholders meeting previously, it targeted to achieve 2009 total production and consumption volume of 171,200 tons, with investment value of VND 34.19 billion, revenue of VND 1.622 trillion, profit of VND 25.34 billion and expected dividend payment of 12%.
The U.S. Department of Commerce confirmed that imports of textiles and apparel decreased by 9.7 percent from April 2008 to April 2009, and import value declined by $5.8 billion, reflecting the depressed worldwide economy. Three countries holding their own in a down market are China, with a 15 percent increase in imports over the previous month; Vietnam, with import values holding steady at USD374 million; and Korea, which increased import volume by 2.5 percent, but lost import value.
The International Finance Corporation (IFC) this month began offering its Better Work Vietnam services to help apparel firms in southern provinces improve working conditions for their staff. The services include assessment against international labor standards and national labor law, customized advisory services for enterprises, and a range of training options for managers, supervisors, and workers. Better Work Vietnam is being introduced in the country with the support of the International Labor Organization. The USD2.5 million, two-year service aims to benefit 700,000 workers in the southern provinces. Tara Rangarajan, Better Work Vietnam’s program manager, said it looked forward to working as partners with Vietnamese apparel enterprises, workers, and the government of Vietnam to make sustainable improvements in labor conditions.
Eighty-two businesses and 24 businesspeople have received the prizes called “Business for Community” and “Businesspeople for Community”. The prizes are based on such criteria as effective business performance, fulfillment of obligations to the State, high responsibility to partners and customers, environmental protection and charity donation. Addressing the prize-giving ceremony in Hanoi on August 2, Vice President Nguyen Thi Doan said the event, which is part of activities to promote trade for businesses, encouraged small and medium-sized enterprises to adopt good business practices. The event was organised by the Ministry of Industry and Trade, the Vietnam Journalists’ Association, the Trade Promotion Department in coordination with the Vietnam Communication Development Company and the Vietnam Information Culture Co. Ltd.
