Business in brief in 15 October 2012
South Korean investors are being attracted to central Da Nang city due to the introduction of favorable business conditions, according to the vice chairman of the municipal people’s committee, Vo Duy Khuong. Khuong outlined the progress made at a Da Nang-South Korea business seminar yesterday. "We have built up policies to attract more Foreign Direct Investment (FDI) projects and we hope that there will be more South Korean investors coming to the city in future," he said. Vietnam has attracted 3,000 projects worth a total of US$2.4 billion from South Korea. Da Nang alone has secured 28 of these projects, worth $701 million so far. A recent report from the city shows that Da Nang has attracted 218 FDI projects with a capital of $3.45 billion.
The Ministry of Finance has approved a proposal of Vietnam National Coal and Mineral Industries Group (Vinacomin), the country’s biggest coal exporter, to halve the coal export tax to 10%. Circular 169/2012/TT-BTC signed by Deputy Minister of Finance Vu Thi Mai is what Vinacomin had expected for a long time to lower coal export prices and thus step up shipments amid slackened global demand.
A precast concrete plant using Australian technology has come online in Long Thoi Commune in HCMC’s outlying district of Nha Be. Australia’s Conrock International Group has transferred technology to local partner Conrock Australia Vietnam JSC to produce precast concrete products in Vietnam. According to a representative of Conrock Australia Vietnam, the firm invested about US$3.5 million to build the facility with a total annual capacity of some 500,000 cubic meters of concrete. It is considered a new environmentally friendly technology solution for construction of industrial facilities, apartments, and office and commercial centers, the representative said. Conrock Australia Vietnam expects the technology to help reduce construction costs by between 10% and 15% depending on scales of projects and shorten construction time by 20-30%.
Air travel during the Tet (Lunar New Year) holiday will become more expensive as of today, when domestic airlines go ahead with a planned price hike. A representative of the Civil Aviation Administration of Vietnam confirmed to the newspaper Nguoi Lao Dong (Laborer) that it had received the proposal of airfare increases from carriers Vietnam Airlines, Air Mekong and VietJet Air. The highest jump from Vietnam Airlines is VND50,000 (US$2.40) per trip, while its Ha Noi – HCM City one-way ticket will rise by VND20,000 ($0.90) to VND2.67 million ($128), not including 10 per cent VAT (value-added tax) and the VND44,000 ($2.11) airport fee. Previously, Jetstar Pacific also increased its prices by about VND60,000 ($2.87) per one-way ticket. Both Air Mekong and VietjetAir have also sent outline proposals to hike their airfares by 3-4 per cent.
Dutch energy and petrochemical company Shell has pulled its liquefied petroleum gas (LPG) business out of Vietnam. Shell sold its entire share in a joint-venture in Hai Phong, and a HCM City-based company, 100 percent of whose stake it held, to Thailand’s Siam Gas Co (SGP). The deal was signed on October 3, and under the agreement, the Shell Gas brand would be replaced by Siam Gas within 3 years since the date when the transaction plan was approved by Vietnamese authorities. Shell Gas Vietnam has not disclosed the values of the purchases. However, according to the Bangkok Post, it was expected SGP paid US$100,000 to buy 100 per cent of Shell Gas Vietnam and another $300,000 for Shell’s 79.64 per cent holding in Shell Gas Hai Phong Ltd. Shell Gas Vietnam said that the share transference was in line with the company’s business strategy, adding that the company wanted to focus on its oil investments in the Vietnam market.
Lam Dong Pharmaceutical Co (LDP) reported third-quarter earnings of VND102.1 billion (US$4.8 million), an increase of 10 per cent over the same period last year. However, due to increasing raw material costs, the company’s gross profit during the third quarter was only VND12.76 billion ($607,600), a decline of 4.56 per cent. LDP’s profit for the first nine months of the year has reached VND17.16 billion ($817,200), exceeding the year’s target by 7.25 per cent.
Bac Giang Minerals Co (BGM) has become the first company in the mining industry to report a loss in the third quarter. Its earnings during the period reached only VND42 million (US$2,000), a sharp decline from the VND8 billion ($383,000) posted in the same period last year. BGM has posted a profit of VND707.5 million in the first nine months, compared to VND27 billion ($1.3 million)in the same period last year.
HCM City Securities Co brokers Nguyen Viet Xuan and Pham Thi Suong have been ordered by the State Securities Commission to pay a sanction of VND85 million (U$4,000) each for lending securities to clients on the accounts of other clients. The commission also revoked Xuan’s practice certificate and fined the company VND105 million ($5,000).
The Bank for Investment and Development of Vietnam (BIDV) will list 2.3 billion shares on the HCM City Stock Exchange under the code BID. The exchange, which approved the listing last week, requires the bank to prepare for the listing within 90 days of the exchange’s decision. The bank sold 84.7 million shares in an initial public offering last December at VND18,583 (S$0.89) per share.
The HCM City Information and Communications Department on Friday ordered VTC Intercon company to immediately stop providing several online games like Surprise Storm, DotA and Age of Empires. DotA and Age of Empires are not licensed while Surprise Storm has been banned due to its violence content since 2010. But VTC continued to provide all three of them. The company faces fines for advertising and providing unlicensed and prohibited games. The city People’s Committee has instructed authorities to severely punish shops that sell gambling games and manufactures who install and sell gambling machines. Gambling is illegal in Vietnam.
Posco E&C Vietnam last Thursday opened its expanded steel-making factory in Nhon Trach Industrial Zone, southern Dong Nai Province. The expanded factory, covering an area of 132,000 square meters, was backed by a total investment of VND100 billion (US$4.72 million) for construction. The company’s steel products are exported for use in large construction projects such as Kallpa (in Chile) and Mega (in Brazil and Australia).
