Business in brief 03/09
Vietnam sent 45,634 workers abroad in the first eight months this year, representing over 50 percent of the year target, said a report of Vietnam’s Ministry of Labor, War Invalids and Social Affairs on Thursday. During this period, China’s Taiwan was the biggest foreign labor market for Vietnam receiving 13,202 Vietnamese workers. The Republic of Korea came second with 5.549, said the report. Other big foreign labor markets for Vietnam included Japan, the United Arab Emirates (UAE), Malaysia, and Russia. According to the ministry, there are about 500,000 Vietnamese workers working in over 40 countries and regions. They send home nearly two billion U.S. dollars each year. Vietnam aims to send 90,000 local labors to work abroad this year, said the ministry.
Vietnam’s central bank set the dollar’s exchange rate a tad higher at VND16,977 Thursday. The state-owned Vietcombank sold at VND17,826, compared with VND17,825 Tuesday. Gold shops sold at VND18,390, compared with VND18,380 Tuesday. Hanoi-based traders expect exchange rates in the free market to be little changed in the near term because dollar supply in the interbank market rose to $ 433 million a day last week from $342 million per day a week earlier.
It is reported that Vietnam Iron and Steel Association announced that in August, Vietnam steel sales was 340,000-350,000 tons, decreased by 40,000 tons than last month. According to the report, although square billet and finished steel inventories are enough, due to the increasing global square billet prices, many enterprises still competitively adjusted up the prices, at present, the selling price in the market is US$520-530 per ton.
DHL launched less-than-containerload service from Vietnam to the United States and Europe, the company’s forwarding division announced. DHL Global Forwarding said the service through DHL’s in-house carrier Danmar Lines will cut about a week off standard delivery times for the shipments. Part of DHL’s broader effort to expand its LCL services around the world, the new Vietnam service will operate out of Ho Chi Minh City to Los Angeles, Hamburg and Genoa. DHL said in its announcement that Vietnam exported about $27.6 billion in goods in the first half of this year, with more than $10 billion of that in garments and footwear.
Many transport companies are considering increasing transportation costs due to gasoline rising VND1,000 per liter on August 30. However, freight costs will not increase more than 15%, said Nguyen Manh Hung chairman of the Vietnam Automobile and Transport Association (VATA) on August 31. Currently, A92 petrol price increased to VND15,700 per liter, diesel fuel rose to VND13,100 per liter. Therefore, fuel for transport companies has increased by 15%. VATA forecast that transport companies would raise charges by between seven to ten percent, though many companies have declined to raise prices, with fewer people traveling by car. Many companies said that instead of increasing their costs, the companies are focused on improving service quality.
Asia Commercial Bank, a major lender in Vietnam, said Sep. 1 that it has launched a low-interest credit service for rice exporters to buy the commodity for stock for shipments. The Ho Chi Minh City-based bank said it would provide soft loans even when rice exporters have not signed export contracts, or have done this but the delivery time has not been finalized. The lender said the loans are non collateral if the borrowers meet the bank’s requirements, and they will enjoy other preferential treatments ACB is providing for exporters in general. Vietnam exported almost 4.5 million tons of rice between January and August, according to industry statistics. Vietnamese businesses have signed contracts to export 5.6 million tons, Nguyen Tho Tri, vice chairman of the Vietnam Food Association said on August 28.
Indonesia AirAsia said it would launch its direct service between Jakarta and Ho Chi Minh City on Sep. 18 with four flights per week on Mondays, Wednesday, Fridays and Sundays. An AirAsia statement dated Aug. 19 said the low-cost carrierwould offer a promotional fare from 199,000 rupiah (almost US$20) from Jakarta to Ho Chi Minh City and an all-in-fare of US$35, also promotional, from Ho Chi Minh City to Jakarta. The new service will mark the first flight for Indonesia AirAsia heading towards Vietnam. AirAsia is a Malaysia-based airline group. AirAsia Bhd. in Malaysia and Thailand AirAsia have their fleets already flying to Hanoi and Ho Chi Minh City, targeting a overall average load factor of 75-85%, the group says.
A bridge spanning the Red River and linking Kim Thanh Commercial - Industrial Park in Lao Cai province to Beishan Zone in Yunnan province opened to traffic on September 1. At the inauguration ceremony, delegates from both countries highlighted the importance of the bridge in the Hai Phong-Hanoi-Lao Cai (Vietnam)-Hekou-Kunming (China) economic corridor. The four-lane bridge, with a total investment capital of more than US$10 million will promote trade and tourism development between northern Vietnam and China’s southwestern region. The 280m-long and 21.5 m-wide bridge has five main pillars. It was completed in three years by Vietnamese and Chinese technicians and engineers.
The Prime Minister has approved a protocol on oil and gas cooperation between Vietnam and Angola which was signed in the Angolan capital of Luanda on April 3, 2008. The PM also asked the Ministry of Industry and Trade to work with relevant agencies to implement the protocol.
Vietnam expects the strategic partnership with Japan will further flourish in the years to come. Foreign Ministry spokesperson Nguyen Phuong Nga made the comment on August 31 in reply to questions from the press in connection with the Democratic Party of Japan’s (DPJ) victory in elections on August 30. Regarding bilateral relations, Nga emphasized, “We strongly believe that the strategic partnership between the two countries will continue to grow and flourish in the upcoming period for the sake of peace and prosperity in Asia, as a result of fine development over the years.” She concluded by saying that relations are envisioned to meet the “aspirations and benefits of the two peoples and to contribute to peace, stability and development in the region and the world as a whole”.
The Hanoi Stock Exchange on August 31 auctioned off US$10 million worth of government bonds out of a total US$50 million put up for sale during the third bidding session of the year. The three-year bond, issued in US dolar by the State Treasury, has a face value of US$100. The lowest offered interest rate is 3.8 percent and the highest is 5 percent per year. The successful bid interest rate is 3.9 percent per year. During the first bidding session on August 24, the State Treasury earned US$100 million from the government bonds. On August 26, it sold US$47 million worth of government bonds at auction out of a total US$100 million up for sale during this year’s second bidding session.
Starwood Hotels & Resorts Worldwide, Inc. will manage Le Meridien Saigon hotel, located in Ton Duc Thang street, Ho Chi Minh City. The agreement was signed on August 31 between representatives of Starwood and Tien Phuoc & 990 Limited Company, the hotel’s investor. The US$120 million hotel, covering 3,236 sq.m, will offer 357 rooms and nearly 14,000 sq.m of office space for lease. The 23 storey-building will be built according to five-star standards. Once completed in the second quarter of 2011, the hotel will give a facelift to the city’s scenery. Starwood is one of the world’s leading hotel and entertainment groups, and now manages major, well-known hotel chains, such as St. Regis, the Luxury Collection, Westin and Sheraton.
Prime Minister Nguyen Tan Dung has recently approved the portfolio of three technical assistance projects that are financed by the Asian Development Bank (ADB). The largest project of the three is on the strengthening of project management and building of strategies for biogas expansion programme in Vietnam, which is estimated at US$1.8 million. The other two include a US$565,000 mega passenger-transport project in Ho Chi Minh City and a US$200,000 Noi Bai-Lao Cai highway project.
Cavico Transport Construction JSC and its joint venture partners, General Construction and Infrastructure Development Company (Licogi) and Song Da Corporation, have signed a construction package with Dakdrinh Hydropower Company Joint Stock Company. Cavico’s portion of this project is $16 million with the construction expected to be completed within 60 months. The 125 megawatt hydropower plant is funded with $212 million capital investment and is located on the Tra Khuc River in Son Tan village in the Quang Ngai province. PetrolVietnam Joinstock Finance Corporation (PVFC) and the Bank for Investment and Development of Vietnam (BIDV) are committed to finance this project. Cavico Transport will construct a 7.5 kilometers long and 4.5 meters wide water tunnel and tunnel Sections No.3, No.4, and No.5. Cavico Transport has recently signed two separate contracts with Dakdrinh Hydropower for Phases I and II of the Dakdrinh hydropower plant project totaling $13.4 million to extract, process, and transport stones.
Accor has welcomed La Veranda Resort on Phu Quoc Island to its MGallery Collection of hotels — the first for the country. Currently known as Grand Mercure La Veranda Resort and Spa, the property is reminiscent of a French Colonial seaside mansion featuring dark wood, mosaic tiles, exposed brick work, ceiling fans, period furniture, and double doors with high ceilings. Offering 43 guestrooms and villas, the resort also features the Pepper Tree restaurant, a day spa, swimming pool, and private beach. According to Accor, MGallery is a collection of distinctive upscale hotels that showcase personality through one or more of four principal elements: vision, design, history, or location.
