Business in brief 23 Dec 2011
The aviation sector of Vietnam is forecast to carry about 36 million passengers by 2015. The Korea Development Institute (KDI) on Thursday announced its final report under a project on development experience from the Republic of Korea. The KDI also forecast that the volume of goods transport by air will increase from 460,000 tons in 2010 to 850,000-930,000 tons in 2015. To meet the demands for passenger and good transport by 2015, KDI said, the Government needs to pour investment into the three major cities of Hanoi , Ho Chi Minh City and Da Nang to link local and international air routes and to boost regional and national economic development as well as ensure national security. However, due to budget limitations, the Government should build mechanisms for large airports like Noi Bai and Tan Son Nhat to attract private and foreign investment as the Republic of Korea has done. According to the KDI, the existing infrastructure at 13 airports in Vietnam is not capable of meeting the demands of passenger and goods transport.
Vietnam Post and Telecommunications Group (VNPT) expects to launch the nation’s second satellite worth some US$300 million by the middle of next year, but its subsidiary VTI has begun a marketing campaign to attract clients. "We are in talks with customers over contracts to lease capacity of the forthcoming telecom satellite Vinasat2,” said Nguyen Quang Thao, sales and marketing manager of Vietnam Telecom International Co. (VTI). VTU is searching for local and foreign clients. The new satellite will have 24 Ku-band channels and cover Southeast Asia including Vietnam, Cambodia, Laos, Thailand, Myanmar, Singapore, and part of Malaysia. VIT has obtained a robust sales performance for Vinasat 1 after a three-year operation. Having 150 conventional and high-resolution TV channels, the first satellite attracts not only local customers but also foreign customers from Laos and Thailand. At present, 75% of C-band capacity and 95% of Ku-band capacity of Vinasat 1 has been used. And it is forecast to be fully utilized by next year.
Telesens extends its presence in the global market with the establishment of a representative office in Hanoi (Vietnam) in the first quarter of 2012. Telesens, an independent vendor of software products and services to the Telecommunications market, headquartered in London, with a development centre in Ukraine, extends its presence in the global market with the establishment of a representative office in Hanoi (Vietnam) in the first quarter of 2012. The main aim of establishing the office is to promote Telesens solutions for inter-operator settlement and business support (Telesens Interconnect Business Suite - TIBS) in the Asia-Pacific market. The chief tasks of Telesens’ new Vietnamese division are collaboration with local partners, cooperation with Communications Service Providers in the Indo-China region and management of in-territory IT-projects.
Vietnam’s State Treasury has raised 750 billion dong ($35.68 million) from selling government debt, with yields remaining steady, the Hanoi Stock Exchange said. The treasury sold 700 billion dong worth of three-year bonds at a yield of 12.10 percent at an auction on Thursday, and also raised 50 billion dong via 10-year debt at a yield of 11.20 percent, the exchange said in a statement seen on Friday. In the previous auction on Dec. 15, the treasury sold 600 billion dong of three-year bond at a yield at 12.10 percent, and 100 billion dong of 10-year bonds at 11.20 percent.
The World Bank announced Tuesday it will allocate US$4.2 billion for a five-year strategy to support reforms and investments key to Vietnam’s transition to a middle-income country. Under the Vietnam Country Partnership Strategy (CPS) for the 2012-2016 period, the funding will be given by the International Development Association (IDA), the World Bank’s concessional arm. The amount would be IDA’s largest allocation to Vietnam. “This is the World Bank Group’s first CPS for Vietnam since it became a lower middle-income country in 2009," said Victoria Kwakwa, country director for the World Bank in Vietnam. Vietnam will also have access to the International Bank for Reconstruction and Development’s resources, proposed to be around US$770 million, through mid-2014.
As many as 78,440 foreigners are working in Vietnam, of whom 41,529 were granted work permits, reported Vietnam News Agency on Thursday quoting a report from the Employment Department under the Ministry of Labour, Invalids and Social Affairs as saying. The report said that the number of unlicensed employees, who work in Vietnam within three months, is 5,581. Most of them are unskilled workers and are working for foreign contractors in the country. Meanwhile, the number of workers who are awaiting work permits accounts for nearly 30 percent of the total.
Vinatex will finish equitization in 2012, local news provider Nhịp cầu đầu tư (Investment Bridge) reported without quoting source and details. In 2011, Vietnam textile industry earned net export revenue of around $6.5 billion, and local consumption share of 48%, up 2% from 2010.
Moreover, Vinatex Corporation has developed VinatexMart network beside chained-stores of member-corporations such as May 10, Duc Giang, Viet Tien. In 2012 and following 5- year plan 2011-2015, Vinatex will continue to its equitization process.
Foreign Direct Investment (FDI) in Hanoi is estimated to have surged by 78.7% from 2010 to $1.5 billion in 2011, the local news provider Gafin reported. Hanoi has attracted a total of 283 new projects with a total registered capital of $957 million, doubled from that of 2010 and 61 additional capital projects worth $543.3 million, up 56.4% on year. Of which, the Yen So sewage treatment construction worth $322.2 million invested by Gamuda Land Co., Ltd, is most noticeable. Vietnammobile project is added a total of $385 million, GTEL JSC raised the charter capital to $117 million. The result is believed to be positive in amid the global economic difficulties.
Dak Lak Provincial People’s Committee reported that over 43 enterprises, agents, and traders of coffee and agricultural products went bankrupt so far with total debts of 300 billion dong, nearly 3,000 tons of coffee, 22 tons of pepper. Ea H’leo Dist had 10 collapsed enterprises with the debts of 100 billion dong, in which 6 stopped operation and another four are operating in standstill. Most of households, as delivering coffee and money to enterprises, had not formed contracts or commitment documents concerning responsibility of each side so dealing with consequences of aforementioned bankrupts is facing so many difficulties.
A senior trade official has praised overseas trade counselors for their substantial contributions to helping businesses seek and expand markets in order to increase exports. Addressing a conference in Ho Chi Minh City on December 22, Deputy Minister of Industry and Trade Nguyen Thanh Bien reported that Vietnam’s exports so far this year have hit US$96.3 billion, an increase of more than 33 percent compared to a year earlier. The sharp increase is attributed to big contributions by trade counselors overseas, who serve as gateways for businesses to penetrate more foreign markets, said Bien. According to Bien, 2012 will be another difficult year for the national economy due to the negative impact of the global economic downturn. He asked the counselors to work harder to support local businesses in establishing new partnerships overseas.
The first Kiev-HCM City direct air route was launched on December 23, announced the AeroSvit – Ukrainian Airlines. Flights to Ho Chi Minh City will be operated on Wednesdays and Saturdays, and back to Kiev on Mondays and Fridays, using Boeing 767s. The direct air route will cut travel time between the two cities to 10 hours. The airlines will give a special offer for passengers flying from Vietnam to Ukraine and European cities with two-way ticket worth from US$590, including tax and other surcharges. AeroSvit is conducting flights to 70 foreign destinations in Europe, Asia, Africa and North America.
The An Khanh Electricity Joint Stock Company inked a US$143 million loan deal yesterday for development of its An Khanh 1 Thermo-electricity Plant. The deal was signed in Ha Noi with The Bank of China, the Import-Export Bank of China, China Construction Bank and the China Bank of Communications. Construction of the $168 million project located in the northern Thai Nguyen Province’s Dai Tu District started in January last year. The first turbine of the planned 100MW-capacity-plant is expected to become operational by next September with the second to follow in the second quarter of 2013. Once completed by the third quarter of 2013, the plant will be connected to the national power grid and generate 800 million KWh per year.
The International Finance Corporation (IFC) has expanded a trade finance line to $30 million for the Vietnam International Bank (VIB) at a time when global liquidity is tightening. The expansion allows the bank to help local companies increase trade, generate foreign exchange and create jobs. Since joining the Global Trade Finance Program in May 2011, VIB has been able to expand its trade-finance products to small- and medium-sized enterprises in key export and import sectors. VIB is one of the newest Vietnamese banks to join the program since its launch in Vietnam in 2007.
The State-run China Development Bank (CDB) will lend the Bank for Investment and Development of Vietnam (BIDV) US$200 million to develop electricity, telecommunications, agriculture, transport, light industry and building material projects under a credit contract signed yesterday. The money will be paid back to the Chinese bank over five years. This is the second preferential credit package which CDB has granted to BIDV following its $100 million loan last year. In the context of limited credit, especially middle and long term loans, the loan has proved CDB’s trust in BIDV in terms of its financial capacity and prestige. The loan is expected to supplement a considerable amount of funds for the Vietnamese bank to improve its capital structure.
