Business in brief 11/21/2008

The Ho Chi Minh Stock Exchange (HOSE) and Dau tu Chung Khoan (Securities Investment) magazine launched a contest on Nov. 19 for the best annual report made by companies listed on its exchange as well as at the Hanoi Securities Trading Centre.

The first Annual Report Contest was organised in February for 2007 reports, open only to firms listed on the HOSE.

Le Nhi Nang, HOSE deputy general director, said the contest looked to promote transparency, professionalism, and creativity in reporting corporate performance and improving investors’ access to information.

Dominic Scriven, managing director for Dragon Capital, the sole sponsor for the contest, suggested reports with an analysis of impacts on the environment would gain significant advantage.

Prizes will be awarded at a ceremony on June 26.

Central bank invites int’l bids for project

The State Bank of Vietnam (SBV) made an announcement on Nov. 19, stating that it is to apply international competitive bidding procedures for goods contracts for its Financial Sector Modernisation and Information Management System (FSMIMS) project. The International Development Association (IDA) has provided a credit facility of 60 million USD to support the SBV’s project. The money will be used to pay for goods and consultancy services necessary for the implementation of the project. The project consists of three primary components; the first of which is designed to modernise the SBV. It will assist the central bank in developing its policies and an institutional framework, as well as increasing capabilities for information management and informed decision-making.

It will provide key input to providing specifications of user needs and the functional requirements of a new ICT platform for information management, and design and build a centralised ICT platform that meets international IT standards to support SBV’s evolving role as a central bank, taking into account all relevant international practices and critical Vietnamese realities.
The second component focuses on strengthening the Credit Information Center (CIC) by assisting the CIC in restructuring the processes for its core business as Vietnam’s public credit registration centre, as well as acquiring and installing a centralised data management system for the collection, storage, processing, analysis and sharing of credit information.

The third component is aimed at enhancing the Deposit Insurance of Vietnam (DIV). It will assist the government-owned deposit insurance agency in re-engineering its business processes and increasing its technological capacity so that the government-owned deposit insurance agency can consolidate its role in Vietnam ’s financial sector safety network.

VietHaus features Vietnamese culture in Germany

VietHaus, a Vietnamese cultural and trade centre in Germany has become an attractive place for German and foreign visitors who wish to understand more about Vietnam and its people.

Visitors to VietHaus can learn about Vietnamese culture, while enjoying traditional Vietnamese dishes. They also understand more about the Southeast Asian nation when going to weekend markets featuring the country’s well-known traditional food and special products such as Minh Long high-quality ceramics and Trung Nguyen coffee.

In addition, many visitors from Italy, Spain, France, the Czech Republic, Hungary, Germany, Brazil and Scandinavian countries choose to stay at the centre’s Ha Long hotel, where they are offered unique Vietnamese-style interior design rooms with affordable prices.

According to VietHaus marketing officer Thomas Grotsch, the centre has contributed to promoting Vietnam’s image in Germany and boosting economic relations and cultural exchange between the two nations.

Viethaus, the first Vietnam’s investment project in Germany, was opened in Berlin in March 2008.

Wall Street Gold gets local agent

An agent for the Wall Street Gold (WSG) Trading Floor of the Wall Street Gold Joint Stock Company (JSC) opened on Nov. 19 at PetroVietnam Financial JSC Long Bien Central Trading Centre in Long Bien District, Hanoi .

The agent will take buying and selling orders for WSG and is also authorised to open WSG gold trading accounts.

Glasstech Asia expo opens

Southeast Asia ’s largest glass exhibition, Glasstech Asia 2008, will open at the Saigon Exhibition & Convention Centre in the city’s Phu My Hung new urban area in District 7 on Nov. 20.

Organisers say the three-day exhibition will bring together the world’s latest technological innovations and market practices in glass materials, manufacturing and processing under one roof.

Spread over an area of 7,000sq.m, the exhibition will showcase presentations of 174 exhibitors from 29 countries, including impressive large-scale country pavilions for China , Germany , Singapore , the United Kingdom and Vietnam .

Seminars held during the exhibition will have industry professionals including architects, contractors, property developers, automobile makers, glass manufacturers, engineers, interior designers and suppliers of glass products exchange experiences and look at future trends.

The exhibition, held annually by Singapore’s Conference & Exhibition Management Services Ptd Ltd (CEMS) and Singapore Glass Association (SGA) and hosted this year by the Vietnam Glass Association (VIEGLASS), is set to draw in 8,000 major traders from all over Asia.

Edward Liu, Managing Director of CEMS, said that Vietnam had been chosen to stage the show based on its promising investment outlook, particularly in the area of architectural glass for which a huge demand has been projected.

Singaporean investors eye health care in Vietnam

HSBC, Bao Viet launch new insurance services

The Hong Kong-Shanghai Banking Corporation (HSBC) joined forces with the Bao Viet Insurance Corporation to launch a new range of property and key personnel insurance services on November 17.

The cooperation is the latest stage in the two corporations’ strategy to diversify the range of insurance products on offer, aiming to provide cover to protect the operations of business customers.

The two sides have previously cooperated in providing a range of life, non-life and cargo insurance products.

The Property Insurance provides cover for businesses in case of sudden property losses as a result of fire, theft or equipment breakdown.

Meanwhile, the Key Personnel Insurance is designed to protect enterprises from the loss of key personnel, such as owners, directors or any other members of staff with significant influence on their business operations.

HSBC is the leading foreign bank in Vietnam , and the launch of these new services is expected to help Bao Viet to consolidate its position as the major player in the Vietnamese insurance market.

Pha Rung shipyard launches 6,500 DWT oil tanker

The Pha Rung Shipyard Company successfully launched a 6,500 DWT oil-chemical tanker in the northern port city of Hai Phong on Nov. 17.

The ship, measuring 110m in length and 18.2m in width, is able to travel at 13 nautical miles per hour. It is the fifth of its kind to be built by the shipyard for a Hong Kong-based transport company.

Also on Nov. 17, the company commenced construction of a 13,000 DWT oil-chemical tanker of 128.6m long and 20.4m wide, which will be able to travel at 13.5 nautical miles per hour.

The successful construction of oil-chemical tankers ranging in capacity from 6,500 to 13,000 DWT will open up new prospects for the company, which was once the country’s largest ship repair establishment. 

Petrolimex revises business targets downwards

Petrolimex Import Export Joint Stock Company (PIT) has revised down its pre-tax profit target of 33 percent for the year, from 45 billion VND (2.7 million USD) to 30 billion VND (1.8 million USD).

The adjustment is based on disappointing results in the first nine months of the year, and estimates for the remainder of 2008.

Difficulties in the domestic economy also affected the results. In the first nine months of the year, the company made 1.38 trillion VND (82.1 million USD) in revenue and 36 billion VND (2.1 million USD) in pre-tax profit.

PIT expects to make a revenue of 1.7 trillion VND ( 101.2 million USD) this year, and earn revenue of 1.54 trillion VND (91.7 million USD) and a pre-tax profit of 33 billion VND (1.96 million USD) next year.

Vietnam – example for global economic integration

Vietnam is an example showing that global economic integration is a motive force for development and attraction of foreign investment, said President of the Lima Chamber of Commerce (CCL) Peter Anders Moores.

Vietnam has registered significant economic growth over the past years thanks to its Doi Moi (renovation) process, President Moores was quoted by Peru’s media on November 19.

Vietnam took advantages from participation in the Asia-Pacific Economic Cooperation (APEC) forum, he said, stressing that after successful organisation of the APEC Summit in 2006, Vietnam’s attraction of foreign direct investment (FDI) has increased, remarkably, becoming one of the world’s 10 largest FDI attraction nations.

President Moores also hailed Vietnam’s export, saying the country’s export turnover increased from 788 million USD in 1986 to 49.9 billion USD in 2007. Vietnam now ranks 11 out of 21 APEC member economies in terms of export, he said.

The CCL President highlighted the importance of this week’s Peru visit by President Nguyen Minh Triet who will attend the APEC Summit. The Vietnamese President is expected to attend a business workshop to be jointly held by the CCL and the Vietnam Chamber of Commerce and Industry, according to Peru ’s website connestroperu.com.

Can Tho signs flurry of pacts

The first ever trade promotion conference in Can Tho city has ended with the successful signing of eighteen memorandums of understanding for industrial development.

The city and the Bank for Investment and Development of Vietnam (BIDV) co-hosted the conference, which had over 150 representatives from enterprises around the country and the world, said the Mekong Delta city People’s Committee.

Memorandums signed between city authorities, investors and economic groups focused on credit supply and investment agreements. Most agreements dealt with investments in industrial development, telecommunication, steel complexes, five-star hotels and service, and hi-tech industrial zones.

It is hoped the conference will help the city become the economic hub of the Mekong Delta.

The city announced 29 projects worth nearly 56.1 trillion VND (3.4 billion USD) at the conference for which investment capital is now being sought. Many of these projects are in the food processing industry.

Thot Not Industrial Zone will be one of the biggest upcoming projects requiring total capital of 4.8 trillion VND (300 million USD). The project will encompass 1,000 ha near Highway 91A, 50 km from the city centre.

Another large-scale project will be the O Mon heavy-industry zone, which will be on 400 ha in O Mon District and require total capital of more than 1.9 trillion VND (120 million USD).

“Investments in infrastructure, ports, airports, industrial zones, the processing industry will be our strength,” say Nguyen Truong Danh, director of the city’s Investment, Trade and Tourism Promotion Centre.

To help attract investors, the city has significantly upgraded its infrastructure.

The city now has five highways, and a new bridge under construction to be finished in 2010. These projects will make it easier for businesses to access HCM City and other Mekong Delta areas.

Additionally, the Can Tho Port and Cai Cui International Port can now receive 10,000-20,000 tonnes ships. Tra Noc airport is being expanded and will be in operation late this year.

The city has received 52 million USD in financial support from the Bank for Investment and Development of Vietnam (BIDV) for these infrastructure upgrades and to complete the building of schools, hospitals, and hotels.

4.1 trillion VND for power projects in Da Nang

As many as 4,115 billion VND will be invested in the construction of 8 hydro-power plants in central Da Nang city.

Nhan Luat joint stock company, a big steel business firm, on Nov. 18 announced its investment in these plants which have a total design capacity of 166.5 MW and total output of 742.6 million KWh per year.

The Phu Tan 2 power plant, the biggest one of the 8 plants with a design capacity of 70 MW, will get 1,750 billion VND.

Its construction is expected to start in the 2 nd quarter of 2009 and complete in the 2 nd quarter of 2012. The plant will produce 329 million KWh of electricity a year.

Vietnam, China provinces find strength in unity

Authorities from provinces along the economic corridor that runs from China’s Yunnan province to Viet Nam’s Quang Ninh province have met to discuss future cooperation in the fields of trade and investment, tourism, transport, education, culture, sports and health care.

At the fourth annual conference on economic cooperation for Yunnan , Lao Cai, Hanoi , Hai Phong and Quang Ninh, taking place in Quang Ninh on Nov. 19-20, they agreed to enhance mutual assistance, particularly between provinces that share similarities regarding their strengths and potential.

This alliance between the five localities along the economic corridor has helped them to accelerate socio-economic development in the area and to cope with the effects of the global economic crisis.

Over the past year, Yunnan-based investors have poured 11.6 million USD into four projects in Vietnam, and the number of Chinese tourists using tourist visas to Vietnam has been steadily increasing, with more than 19,000 visitors during the first seven months of 2008, representing a 7.5 percent year-on-year increase.

Yellow Lion oilfield starts pumping black gold

Vietnam’s fourth-largest oilfield, the Su Tu Vang (Yellow Lion) oilfield, situated on lot 15-1 on a continental shelf off the central province of Binh Thuan, has officially commenced production.

Vu Ngoc An, General Director of the Cuu Long Joint Operating Company (CL JOC), told a press briefing in Hanoi on Nov. 19 that in the month since the field’s first oil well began pumping on Oct. 14, the company has put another four wells into use.

An said that, once the sixth well in the Su Tu Vang oilfield is operational, his company expects to double its crude oil output to 100,000 barrels per day. As a result, the total output for this year is expected to hit 3 million tonnes, 10 percent higher than planned.

The CL JOC, the first company of its kind in Vietnam, was established under an agreement regarding oil exploitation on Lot 15-1, signed on Sept. 16, 1998 by the Vietnam Oil and Gas Group (PetroVietnam)’s Exploration and Production Corporation (PVEP), the UK’s ConocoPhillips, the Republic of Korea’s National Oil and Gas Corporation and SK Company, and Monaco’s Geopetrol Company.

The company now operates four oilfields, including Su Tu Den (Black Lion), which commenced operations in Oct. 2003. Su Tu Trang (White Lion) and Su Tu Nau (Brown Lion) are scheduled to begin production in next few years.

The CL JOC has been one of the nation’s top two companies in crude oil output and export since 2003, second only to the Vietnam-Russia Oil and Gas Joint Venture (Vietsovpetro).

Trade fair opens to boost investment in central region

An international trade fair of the central key economic region, CREXPO 2008, was opened in central Da Nang city on Nov. 19.

The fair, jointly held by the Ministry of Industry and Trade and the municipal People’s Committee, drew 160 businesses from 20 provinces and cities nationwide and 20 foreign enterprises from China , Laos and the Czech Republic .

Businesses have showcased their products at 400 booths, including agro-forestry-fisheries items, foods and foodstuff, fine arts and handicraft products, construction materials, textiles and garments, and machines.

Banking and insurance services, information and telecommunications technologies as well as projects calling for investment were also introduced at the event.

Addressing the opening ceremony, Deputy Minister of Industry and Trade Nguyen Thanh Bien said this annual event is one of the important trade promotion activities which contribute to developing the domestic goods market of central and Central Highlands key provinces and cities.

It also serves as a bridge for domestic businesses to integrate into the world’s business community, promoting exports, investment and tourism, he added.

A seminar on trade promotion to China’s market and meetings on commercial exchanges between businesses will be held during the event which will last until Nov. 23Int’l security conference opens in Hanoi

The 15 th Asian Professional Security Association (APSA) international conference and the first International Security Show (VietSecurity) opened in Hanoi on November 18.

The events are drawing the participation of APSA members and companies from 10 countries and territories.
More than 20 papers delivered at the conference discussed the security and safety situation in Vietnam , the region and the world. Delegates from the Republic of Korea , Malaysia and Thailand said that Vietnam ’s security and safety environment was highly appreciated by foreign investors.

However, they said that the deep international integration is posing many challenges for the country, particularly international crimes, thus requiring strategic solutions at national level.

VietSecurity will conclude on November 20.

Ministry plans import restriction to curb deficit

The Minsitry of Industry and Trade (MIT) is planning restriction on the import of products already produced domestically and non-essential consumer goods to reduce trade deficits next year.

Restricted imports include tobacco, under-12 seat CKD cars and motorbike parts and components. The auto industry will see the sharpest drop in imports with import value to scale down to 7.2 billion USD in 2009.

The MIT said other measures include the full use of imports stockpiled in warehouses.

Asia remains the largest import market for fuel and materials for its advantages such as close geographical location and good prices, making up between 75 and 85 percent of the total value. Meanwhile the Ministry said it encouraged importing advanced technology from developed markets such as the United States and Europe .

Import value is expected to increase 15 percent to 96.6 billion USD next year while exports are likely to rise 18 percent to 76.7 billion USD, making 19.9 billion USD in trade deficits, up five percent from 2008, the MIT reported.

Index drops on global unease

Share prices continued to fall on Nov. 18 on the Ho Chi Minh Stock Exchange, with mixed investor sentiment.

The VN-Index lost 4.36 points, or 1.26 percent, to close at 340.69, while trading volume increased slightly to nearly 12 million shares on a turnover of 362.5 billion VND (21.6 million USD).

Trading activity continued to be minimal. Only Sacombank (STB) showed significant activity, with 2.2 million shares traded, while runner-up as most active share, Saigon Securities Inc (SSI), saw only 923,000 shares change hands.

”We are seeing caution from buyers, both domestic and foreign”, commented a Dai Viet Securities report. “It’s a necessary attitude at this time, as the world economy is witnessing highly complex developments.”
The report noted that the crisis had spread to retail and to manufacturing industries, with such major names as GM and Ford now struggling to survive.

A Vietnam International Securities Co report also showed worries about the short-term outlook for the economy, citing news that Standard&Poor’s was considering lowering Vietnam ’s credit rating. The report cited Deutsche Bank and Citigroup data predicting that Vietnam ’s economic growth would slow to 5.2 percent next year, while the US , Japanese and EU economies are all entering 2009 in recession.

Bloomberg chairman Peter Grauer told Dau tu Chung khoan (Securities Investment) last week that declines in economic growth would certainly affect companies’ profits, and would slash share values. He said the downturn might last until the end of 2010.

Shares prices in Hanoi on Nov. 18 bucked the trend, as the HASTC-Index rose by 0.93 percent to end the day at 111.38. About 7.5 million shares changed hands for a total value of 233.6 billion VND (14 million USD).

French consultant opens info day of Vietnam business

PriceWatersHouseCoopers (PWC), a France-based finance and market consultant, has opened the “Vietnam Day” in Paris bringing together French businesses in various industries who share the same interest of investing in Vietnam.

The seminar on November 18 was co-organised by PWC and the Vietnamese Embassy in France, attracting well-known groups that have operations worldwide, including Electricity of France (EDF), the French National Railway Company (SNCF), ESI Groupe, Movement of the French Enterprises (Medef International) and members of Vietnam’s diplomatic mission in France.

PWC specialists, who belong to a Vietnam trade promotion group – Group Business Vietnam – presented the legal framework regarding investment and doing business in the country.

PWC executives brought to the ocassion an overview of the economic situation and business opportunities as well as challenges in Vietnam. They underpinned that there are high potentials for foreign enterprises in the Southast Asian country, particularly those engaged in the six areas that Vietnam is calling for more investment, including infrastructure, industry and logistics, pharmaceuticals and healthcare, environment, real estate, information technology and communications.

The seminar has created a forum for French enterprises to openly raise questions of concern in regards to auditing and accounting tools, recruitment of financial, banking and stock market staff.

PWC has operated in Vietnam for many years. The company provides financial consultancy and market strategies to prospect and current investors in Vietnam.

Japanese logistics firm opens hub in Vietnam

 Japanese-invested logistics firm Yusen Vietnam put its international entrepot into operation on No.17, in a bid to meet increasing demands for logistics services in Vietnam .

The 2.3 million USD entrepot is located in Hanoi ’s neighbouring province of Hai Duong , which provides easier access to the Hai Phong seaport and Noi Bai airport,

“The operation of the international entrepot will not only meet increasing demands for logistics services in Vietnam, but also function as a logistics hub in the region, linking with China, Thailand, Cambodia and Laos,” said Yusen Vietnam’s general director Tetsuro Tsuzuki.

Tsuzuki said although Vietnam and the global economy were experiencing financial challenges, demand for logistics services is still booming following the ongoing foreign investment hike in the country.

“One of the most important factors that makes Vietnam attractive in the eyes of foreign investors is cheap operation costs, even compared to China ,” he added.

Trillions of VND needed for industrial mineral sector

The Ministry of Industry and Trade (MOIT) has approved a master plan with a total value of over 2,500 billion VND to improve the industrial mineral sector in order to better meet the demands of export and domestic production.

The plan will create zones for the exploration, exploitation, processing and use of industrial minerals, including serpentin, barit, grafit, fluorit, bentonit, diatomit and talc by 2015 with a vision to 2025.

According to the MOIT, capital for the plan will be mobilised from a number of sources. The state budget will invest in technology infrastructure adjacent to the exploitation zones, large-scale refinements and scientific studies, while ore exploiting and processing projects in economically-disadvantaged areas will be given access to state credit.

To mobilise sufficient capital for the plan, the ministry plans to enforce the decentralisation of resources management, encourage all economic sectors and foreign investors in the ore exploitation and processing industries.

Centrally-governed cities doing a roaring trade

Trade and industry representatives from the five centrally-governed cities of Hai Phong, Da Nang , Hanoi , Ho Chi Minh City and Can Tho met in Can Tho on Nov. 18 to seek deeper cooperation based on each city’s strengths.

Participants at the meeting asked the Ministry of Industry and Trade to give investment priority to infrastructure development, thus providing opportunities for the five cities to spearhead the country’s process of industrialisation and modernisation.

Statistics, released at the meeting showed that these cities have been responsible for exports totalling 34.86 billion USD so far this year, accounting for 53.62 percent of the country’s total export value.

The cities’ import values are estimated at 43.7 billion USD, representing over 52 percent of the country’s total, while their retail sales and service revenues stand at 438.3 trillion VND (27.3 billion USD) or 45.19 percent of the nation’s total.

Despite facing numerous difficulties, the five centrally-governed cities still obtained high industrial growth rates, with a total estimated industrial production value of 316.3 trillion VND for 2008.

Hai Phong recorded the highest growth rate of 18.5 percent, followed by Can Tho, with 17.07 percent, Hanoi , 14.8 percent, Da Nang , 14.3 percent, and Ho Chi Minh City , 13.5 percent.

Wireless communications centre to open in HCM City

A wireless communications development centre is to be built in Ho Chi Minh City under a 54 million EUR contract recently signed by the British company Harvey Nash and the French telecoms firm Alcatel Lucent.

According to Harvey Nash, the centre, which will be connected with Alcatel’s software research and development centre in Germany centre in Germany , will provide wireless telecom solutions that meet international standards. It is expected to create more than 200 jobs.

Harvey Nash’s Global Managing Director Paul Smith said the company’s decision to establish such a centre was based on the intellectual competence of the young generation of Vietnamese in the IT and telecoms sectors.

He also said he believed that the project would help promote Vietnam as a centre for advanced software research and development.

Harvey Nash has been operating in Vietnam since 2000 and has built up a list of blue-chip clients, including Honda, Vielife, Reliance Globalcom, The Discovery Channel and most recently, Prudential.