Friday, August 31, 2007

American giant GE opens offices in Vietnam and Cambodia

The US giant GE Group will expand its operations in Viet Nam, according to a GE official.

“We want to share our resources with Viet Nam through our experiences in pioneering enterprise management, law conformity and business transparency in Viet Nam,” said Colin Low, GE National Executive for Singapore, the Philippines and Viet Nam.

GE’s tentacles are felt throughout virtually every corners of global business with its six arms or GE Infrastructure, GE Industry, GE Commercial Finance, GE Consumer Finance, GE Healthcare and NBC Universal leaders in their respective fields.

Since it established its representative offices in Ha Noi and Ho Chi Minh City in 1993, GE Viet Nam has worked with partners such as Viet Nam Airlines, the Viet Nam Railway Corporation, Electricity of Viet Nam and the Viet Nam Oil and Gas Corporation (PetroVietnam).

GE Establishes New Branch Office in Cambodia

InterContinental Hotel, Phnom Penh
July 23, 2007

GE Branch
Launch of the GE branch office in Cambodia. Full Size

The respected U.S.-based company General Electric made its presence felt in Cambodia with the launch of a new branch office in Phnom Penh. The branch office will be part of a network of regional branch offices of General Electric International, Incorporated, a wholly owned subsidiary of the General Electric Company. The launch, held at the InterContinental Phnom Penh, was attended by U.S. Ambassador to Cambodia Joseph A. Mussomeli, HE Deputy Prime Minister Sok An, other high ranking government representatives, GE senior management, and business associates from the region.

In his remarks, Ambassador Mussomeli said, "The fact that an American company as prestigious as General Electric is opening an office in Cambodia illustrates the promising investment opportunities that exist here. Cambodia is open for business, and we hope that many more American companies will follow in GE's footsteps."

President, GE International, Mr. Ferdinando Beccalli-Falco, said, "We’re very excited with Cambodia. GE goes where there is growth and currently there is a lot of expansion in Cambodia driven by garment exports, infrastructure building, increasing consumption and tourism." According to a GE news release, the decision to invest was also buoyed by promising signs of the emergence of a vibrant and competitive private sector and great untapped potential to attract higher levels of foreign direct investment.

GE is a high technology-driven company that plays a key role in many sectors. Recently, it has significantly grown its emerging markets strategy, with projections that the company will get 55% to 60% of its revenue from outside the US within the next 5 years, compared with 50% now.

"Emerging markets are becoming vital to global companies due to their explosive growth," said Pornlert Lattanan, President, GE Thailand/Cambodia. "GE has been growing 20% annually in Southeast Asia, and we expect a similar growth pattern in Cambodia. We need people on the ground to support our growth plans. Hence you have today’s branch launch," he explained.

Operating in six other countries in Southeast Asia since the late 1960s, GE’s presence in Cambodia will mean more jobs for Cambodians as the company looks to the country as a key revenue contributor to its annual revenue of USD 6 billion in Southeast Asia.

HE Deputy Minister Sok An said, "We welcome more public and private sector partnerships to create a dynamic and stabilizing economy. GE’s presence in Cambodia really helps affirm our place in the emerging markets."

GE has a long tradition of innovation, dating back to the world's first practical incandescent lamp invented by GE's founder, Thomas Edison in 1876. Other innovations include the development of the X-ray, the jet engine, CT-scan, the world's first 4D ultrasound system, capturing 3D images live, and recently developments in nanotechnology. GE carries a blue-chip reputation with accolades including "World’s Most Admired Company" by Fortune Magazine, and "World’s Most Respected Companies" by the Financial Times in multiple years.

$5 Billion injected into Vietnam's Dung Quat Economic Zone

VietNamNet Bridge – By mid August 2007, Dung Quat Economic Zone (EZ) had attracted $5.4bil in capital from 119 investment projects, according to the Dung Quat EZ Management Board.

The 119 investment projects include 34 operational projects and 45 projects under construction.

Dung Quat EZ has become very attractive in the eyes of investors since the government has tried to turn Dung Quat into the dominant EZ in the central region and the Central Highlands by offering many investment incentives.

The driving force of the Dung Quat EZ is the Dung Quat oil refinery, which has given the EZ a new face in the last two years.

According to the Quang Ngai Department for Labour, War Invalids and Social Affairs, the total number of employees working in Dung Quat EZ has reached 21,966: 14,590 workers in the construction sector and 7,376 workers in enterprises. More than 50% are residential workers.

Chairman of the Quang Ngai People’s Committee Nguyen Xuan Hue said that the Dung Quat EZ had been highly praised thanks to its potentials and competitiveness.

Investors have said that they once hesitated to make heavy investment here as they did not see transparent legal framework. Currently, as investors do not have anxiety about the legal framework, they are not delaying their investment any more.

It is expected that in the near future, the rapid development of Dung Quang EZ will lead to a serious shortage of labour force. Experts have urged the Quang Ngai People’s Committee to draw up a long-term strategy on local labour force development.

Many investors in the Dung Quat EZ now need skilled labourers but the supply is limited. The Dung Quat Vocational Training School plays the major role in providing human resources for the Dung Quat EZ. It can train around 1,000 workers in long-term courses and 1,000 in short-term courses every year.

Vietnam: US$500 million to flow in Hoa Lac Hi-tech Park

The Authority of Hoa Lac Hi-tech Park has said the agency has just inked with local and foreign investors memorandums of understanding for projects worth totally US$500 million to be invested in the park in 2007-2008. Big investors in terms of capital include U.S-invested V-CAPS (US$155 million) and Thuan Phat JS Co. (US$70 million), Tuoi Tre reports.

Vietnam & Holland team up for marine equipment & services

Dutch marine headquarters established
The Holland Marine Headquarters in Vietnam (HMHV) made its first public appearance on Wednesday in Hanoi. HMHV represents seven Holland marine equipment and services providers and functions as a bridge between the Netherlands’ marine equipment producers and local vessel makers, Lao Dong reports.

Vietnam 1st Energy forum & exhibition

VE Expo 2007 set for October 30-November 2
The first national forum and exhibition fair on the development of Vietnam’s energy, or VE Expo 2007, will take place at My Dinh National Convention Center in Hanoi on October 30-November 2. The event is expected to gather more than 100 domestic and overseas groups and corporations, Lao Dong reports.

$500 million investment committed to Danang Vietnam

VietNamNet Bridge – On Tuesday witnessed more than half a billion U.S. dollars committed to property projects in the central coast city of Danang on the sidelines of a regional investment, trade and tourism forum.

South Korea's Kreves Development Co., whose parent is Yujin Kreves Co., signed a contract with the city to invest US$200mil to develop apartment and office building projects.

The company will develop two 28-story and 30-story apartment buildings for 1,600 households, a 42-story complex, an international school, and a department store in Hoa Cuong Bac District.

The projects will supply houses for Korean and foreigners who are doing business in Danang's industrial parks and neighboring ones.

Yujin Kreves Co. entered in Vietnam some 10 years ago with a factory of metal tableware goods and stainless steel plates built.

The city awarded a license to VinaCapital to develop the VinaCapital Square urban development project. The new town east of the Han River Bridge in Son Tra District will be capitalized at US$325mil, one of the biggest real estate projects in the city.

VinaCapital Square will cover nine hectares, comprising two shopping centers, two 4-5-star hotels with 600 rooms, a 25,000 sq.m conference centre and a 42-storey office building. The investor also plans to build more than 1,300 high-grade apartments and villas.

At the forum, officials and business executives highlighted investment trade and tourism potentials in the East-West Economic Corridor (EWEC), but urged reforms should be taken to effectively tap them.

They said many things, especially investment policies and administrative reforms, remained to be done to foster EWEC growth from mere transport connectivity to economic prosperity.

The forum was part of the EWEC Week, which started Monday with the participation of more than 500 investors and government officials from Vietnam, Laos, Thailand and Myanmar and representatives of donors and development partners.

Vietnam, Laos, Thailand and Myanmar have roads connected to EWEC provinces after the opening of Friendship Bridge II, and are building frameworks of cooperation between their provinces to make EWEC a real economic corridor.

EWEC will prove to be attractive to investors as it will help to reduce costs for goods and passenger transport between the four countries, investors said.

Vietnam's Deputy Minister of Planning and Investment Cao Viet Sinh said the completion of the corridor would be an opportunity for the countries to better access natural resources, seafood and energy.

Experts said at the meeting that the central part of Vietnam had many advantages to make the most of EWEC for fueling socio-economic growth.

The 1,450-km corridor stretches from Myanmar to Vietnam's Danang through Thailand and Laos. Danang can be used as a gateway to the Eastern Sea by Mekong sub-region nations.

The central region has many infrastructure projects underway. Domestic and international airports under renovation include Danang International, Phu Bai in Hue, and Chu Lai in Quang Nam.

There are many seaports under construction or upgrade, such as Chan May in Thua Thien-Hue, Tien Sa in Danang, Ky Ha in Quang Nam, Sa Ky in Quang Ngai and Vung Ang in Ha Tinh.

Danang and Hue will become the hubs in the central region with a series of industrial zones like Phu Bai, Lien Chieu and Hoa Khanh, and other economic zones, namely Lao Bao, Vung Ang, Chan May-Lang Co, Chu Lai and Dung Quat.

Ayumi Konishi, country director of the Asian Development Bank (ADB)'s Vietnam Resident Mission, said the bank had supported development of infrastructure and helped reduce poverty along the corridor.

He told the Daily that many Japanese investors were attending the forum to see whether they could invest along the corridor.

Somsavat Lengsavad, deputy prime minister of Laos, said: "We would like to request our meeting to consider together on how we can realize the concept of "Four Countries, One Destination".

At the forum, two international partners who do not belong to EWEC signed agreements on investment projects in Danang during the EWEC Week.

(Source: SGT)

Citigroup: Viet Nam able to resist US credit crunch

Viet Nam will weather the US credit crunch thanks to its high industrial production growth, strong increases in retail sales and foreign direct investment influxes, said a Citigroup official on August 29.

At a seminar entitled “Asian market and economic situation” in Ha Noi, Citigroup Asia Pacific Economic and Market Analysis Head Yiping Huang did however warn that the country must reign in inflation as the Vietnamese dong (VND) being continuous to be pressured by unexpected risks.

Citigroup experts have suggested that Viet Nam control inflation by tightening its monetary policy and the management of key commodity prices.

Vietnam's IT prowess rises with $5 billion factory plan

World's largest electronics manufacturer follows Intel's path into Vietnam

The world's largest contract electronics manufacturer, which assembles gadgets from Apple Inc. iPods to Sony Corp. PlayStation 3 consoles and Nokia Corp. handsets, became the latest company to announce a high tech investment in Vietnam, with plans to spend a massive $5 billion over the next five years.

The investment by Taiwan's Hon Hai Precision Industry Co. Ltd. will be aimed initially at building a base of electronic components factories near Vietnam's capital, Hanoi, a Hon Hai spokesman said Thursday.

The huge investment shows that Vietnam has continued to increase its allure as a haven for IT investments. Last year Intel Corp. announced it would expand a chip packaging and testing project in Vietnam into a US$1 billion affair, more than triple the size of the original plan. The factory is slated to begin operations in 2009, near Ho Chi Minh City. Earlier this month, Taiwan's Compal Electronics Inc., the world's second largest laptop PC maker, revealed a plan to invest US$30 million in a factory in Vietnam. The company plans to make notebook PCs at the factory, which will be located near Hanoi.

AirAsia plans low-cost airline in Vietnam

KUALA LUMPUR: AirAsia Bhd will today sign a letter of intent with Shipbuilding Industry Group with a view to establishing a joint venture low-cost airline in Vietnam.

AirAsia, in a filing with Bursa Malaysia yesterday, said the proposed partnership would focus on securing the licence to operate a new Vietnamese airline that would serve domestic, regional and international routes.

“The new airline will be built on the successful low-cost model pioneered by AirAsia in this region,” it said.

The statement said the airline would carry the name VINA AIRASIA.

The new airline would serve domestic, regional and international routes, and eventually build two distinct divisions to facilitate short- and long-haul aviation, AirAsia said.

Vinashin will assist the JV company in securing grant of governmental or regulatory approvals, concessions, permission, licences, certificates and any other approvals to facilitate operations of the new airline.

Vietnam rethinking some logging operations

Trees on Lo Duc Street in Ha Noi. The illegal logging of dalbergia tonkinesis trees in the city has prompted authorities to strengthen the management of the capital’s valuable trees.—VNS Photo Truong Vi

HA NOI — The illegal logging of dalbergia tonkinesis trees in Ha Noi recently has prompted the Ministry of Agriculture and Rural Development to strengthen the management of the exploitation and consumption of this kind of wood.

By order of the Ministry of Agriculture, the exploitation of dalbergia tonkinesis wood, also known as sua wood in Vietnamese, must be stopped temporarily nation-wide until the ministry issues new instructions concerning both wild and cultivated sua trees.

The Ministry also insists on a temporary cessation of sales and consumption of sua wood.

The decree was issued after a series of illegal logging incidents occurred in the capital, forcing the Ha Noi Party Committee to request relevant offices to verify and determine proper punishment.

An official at the Ha Noi Transport and Public Works Department said that current measures were not strong enough to protect the precious trees in the city.

At present, a fund has been allocated to trim branches, assign numbers and plant new trees. No money is spent on protecting the trees when night falls.

Slight sanctions

Sanctions imposed on violators who chop down green trees in Ha Noi remain too slight. Current punishment is mainly educational.

Nguyen Vu Huu Thanh, director of Ha Noi Green Park Company warned that illegal loggers would not give up their lucrative practice so easily. Thanh believes that it will take more than an official document asking officials such as people’s committees, forest rangers, transport and public works departments to protect sua trees.

According to the office manager of Viet Nam Forest Products and Wood Association Office Trinh Vi, sua is listed among rare and precious trees in Viet Nam’s red book. The State prohibits the exploitation and use of this tree for commercial purposes.

Statistics released by the Ha Noi Transport and Public Works Department show there are about 1,250 sua trees on 360 streets in 9 inner districts. Their ages span from 8 to 50 years old.

The biggest tree is 60cm in diameter, and the smallest is between 5cm and 7cm. Almost half of sua trees measure 30cm and upward in diameter.

The Ha Noi Green Park Company, in collaboration with police forces also buckled down to protect the existing population of sua in Ha Noi. The company said it would move small trees to a nursery to protect them.

Upon hearing the news, recently released by the local media, surprised Hanoians have become curious about the illegal logging of the trees. The illegally logged sua is allegedly worth a billion dong.

A sua wood trader, Vu Van Tuan, confessed to the police in Ha Noi’s Dong Da District that he was in cahoots with two other people to illegally chop down a sua tree in Dong Da District. He said he had sold the tree to a Chinese trader for VND100 million. Tuan said he had earned VND30 million in profit.

In another case, the Tuan Chinh Commune People’s Committee in Vinh Phuc northern province’s Vinh Tuong District sold three sua trees for about VND1.3 billion, each nearly 20 years old. The communal committee sold these trees to make space to upgrade its grounds.


A Hanoian researcher, Bang Son, provided a historic document about ancient Ha Noi stating that sua wood was very popular choice for the wooden furniture which once decorated the imperial palaces of the royal and rich families during China’s Minh dynasty.

According to Son, the aged pith of sua, usually over 100 years old, is most commonly used for furniture. The wood fibre of sua wood is smooth, either stiff or soft, and its veins are beautiful. It also has a slight perfume.

Many sua trees grow in the botanical garden. The trees are also found in the streets of Phan Dinh Phung, Tran Hung Dao, and Hoang Hoa Tham.

Sua is usually in bloom after the Lunar New Year festival, from the end of January to early February. The tree’s leaves are slightly green, and the flowers have small white petals. When the flowers fall from the trees they look like falling snow.

Many Hanoians would like to keep this unique and beautiful tree as more than just a memory. — VNS

Wednesday, August 29, 2007

Vietnam coffee crop to decline

Coffee output in Vietnam, the world's top robusta producer, is forecast to decline 10 to 15 percent this year to around 16-18 million bags from a record crop last year, a leading industry official said.

"Last year it was a bumper crop and post that yields usually drop," said Vivek Verma, managing director of Olam International's coffee division. "It could have been worse but high prices encouraged farmers to take good care."

Coffee crops typically move in bi-yearly cycles, with a good harvest followed by smaller one.

A lower crop in Vietnam plus a global deficit of 4 million bags according to a Reuters poll in July, may support London's robusta futures market prices.

But Verma said London robusta futures, which have declined from highs, were expected to trade between $US1600 ($NZ2276) to $US1750 a tonne because of easing global supplies.

"I don't think we will go back to $US1800-$US1900 range very soon now, unless something happens to (the) Brazilian crop or there is major disruption in supplies," he told Reuters in an interview. ...more....

Philippine's largest fast-feed chain to expand into Vietnam

Jollibee to put up 5 more stores in Vietnam

Chain eyes expansions in US, China, Saudi, Indones

By Elizabeth Sanchez-Lacson
Last updated 03:22am (Mla time) 08/28/2007

Jollibee Foods Corp., the country’s biggest fast-food chain, is expanding its stores in Vietnam to nine by the end of this year as it remains very upbeat in that country’s economic prospects.

Vietnam is touted as the Pacific Rim’s fastest-growing economy after China.

Jollibee is opening five stores in Vietnam this year on top of the two company-owned units set up last year and two existing franchise outlets, sources said.

Dennis Flores, vice president and country head for Jollibee Middle East, said that Vietnam was an attractive market with a population of 85 million and an economy that was growing at 7 to 8 percent a year.

“Vietnam is an attractive market with the high growth of western fast food industry and the improving performance of our existing stores,” Flores said.

Jollibee chairman Tony Tan Caktiong has traced the fast food giant’s strong business growth in its foreign operations to continuing improvements in product tastes to suit certain markets, particularly China, Indonesia, Vietnam, Dubai and the United States.

Other food and beverage companies have also announced their expansion strategies in Vietnam, among them San Miguel Corp. and Liwayway Marketing Corp., the maker of the "Oishi" snack food brand.

Aside from Vietnam, Jollibee said it wanted to focus on expanding into the United States, China, Indonesia and Saudi Arabia.
Tan Caktiong said the group would expand the Jollibee, Red Ribbon Bakeshop and Chowking brands in the United States.

Jollibee and Red Ribbon recently opened in Las Vegas, the biggest city in Nevada and a major tourist, shopping, vacation and gambling destination.

Red Ribbon also recently opened its first store in New Jersey on the east coast of the United States.

In China, Jollibee is keen on expanding its Yonghe King chain and to acquire three more brands, possibly in the fast food sector within the next two to three years.

Jollibee is also looking at opening its first stores in Asia’s big cities such as Jakarta in Indonesia and Riyadh in Saudi Arabia.

Jollibee said it remained interested in the market in India despite scuttling an acquisition earlier due to the high price being asked.

Thai Airways adds flight to Saigon Vietnam

THAI adds flight to Vietnam


Thai Airways International (THAI) is adding one weekly flight to its Bangkok-Ho Chi Minh City (HCM) route on Oct 28 to further consolidate its position as the largest capacity provider on the fast-growing sector.

The national carrier would want to add even more flights on the route if the Vietnamese authorities permitted it, as it sees the growing air traffic being spurred by the fast-growing business and leisure travel in the southern Vietnamese city.

Hanoi allows THAI to add one flight a year to the HCM route and with the additional flight, on every Thursday evening, THAI would have used the maximum capacity as permitted, according to Nond Kalinta, general manager of THAI in Vietnam.

THAI currently operates 16 flights a week on the Bangkok-HCM route, with a combined weekly capacity of about 28,000 seats, more than those provided by other carriers on the route including Lufthansa, Air France and Air Viet Nam.

However, THAI's flights from Bangkok to Hanoi will remain unchanged in the new high season that begins at the end of October, at 14 a week, due to fiercer competition on the route from low-cost carrier, Thai AirAsia, and slower growth in traffic demand in Vietnam's capital than in the former Saigon, he said.

Budget airlines have yet to enter the Bangkok-HCM route, though Nok Airlines and Thai AirAsia have been trying to secure the rights from Vietnam to offer regular services to HCM by the end of this year.

The flag-carrier enjoys a load factor of 75-80% on the Bangkok-HCM at present.

THAI is using Airbus A300-600 jetliners, each with about 240 seats, on all its Vietnamese services.

Meanwhile, AirAsia, the parent airline of Thai AirAsia, hopes to commence a daily flight to HCM from its Kuala Lumpur home base by the end of this year.

AirAsia is already flying the Kuala Lumpur-Hanoi sector.

In another development, Malaysia Airlines will add more seating capacity to flights between Kuala Lumpur and Hanoi and HCM by using larger aircraft.

Vietnam agrees to 2 more industrial parks in Vung Tau

PM agrees to more IPs in Ba Ria-Vung Tau
14:40' 28/08/2007 (GMT+7)

VietNamNet Bridge – Prime Minister Nguyen Tan Dung last week gave approval in principle for developing two new industrial parks and expanding an existing one in the southern coastal province of Ba Ria-Vung Tau.

The three industrial parks (IPs) are Phu My III (800ha), Dat Do (500ha) and the expanded Phu My II (by an additional 400ha).

The Prime Minister also agreed to add the new IPs to the list of industrial parks to be developed between now and 2015. The projects are part of a plan to develop new IPs in the province, which is now home to nine IPs.

Previously, the coastal province has plans to set up six new IPs as well as to expand Phu My II IP to accommodate new tenants now that existing industrial estates there have been nearly full.

The six new IPs on the tentative list are Phu My III, Chau Duc, Long Son, Dat Do, Kim Dinh and Cai Mep Ha.

Since Dong Xuyen Industrial Park was born in 1996 as the first industrial park, the province has set up eight more IPs with a total area of nearly 35,390ha. Several of these parks are now full including Dong Xuyen and Phu My I, while other IPs have enjoyed 80% occupancy.

Operational industrial parks have so far attracted 140 projects with total investment capital of some US$6.7bil. Among them, 70 are foreign-invested projects with pledged capital of US$4.3biln and the rest are local ones capitalized at US$2.45bil.

In 2006, IPs in the province attracted 12 fresh foreign investment projects worth nearly US$1.36bil, making the province the top destination for investment last year with US$2.26bil in committed investment.

Many investors prefer Ba Ria-Vung Tau as an ideal place for heavy-industry projects thanks to its location and the availability of many ports.

In the first eight months of this year Vietnam attracted about US$8.3bil in fresh FDI inflow. Ba Ria-Vung Tau Province alone attracted about US$1.07bil in the January-July period and thus maintained its leading position.

The province hopes that it will be able to attract US$2.5 to US$3bil in FDI inflow this year.

Therefore, the establishment of more IPs is becoming more urgent if the province is to be able to receive more investors, according to experts.

Vietnam has the largest salary gap in Asia

local salary gap near top in Asia

The pay gap between clerical staff and senior management in Thailand is the second largest in Asia, according to the management consultancy Hay Group.

Senior managers have gross salaries 10.6 times those of lower-ranking clerical staff, a level second only to Vietnam. More developed economies in the region such as Australia, South Korea and New Zealand have pay gaps of just 3.1 times, following the trends of mature economies such as the UK and US.

Boonlerd Viboonkiat, country manager for Hay Group's reward information services, said the pay gap in Thailand was influenced by the need for companies to recruit higher paid expatriates to compensate for local skill shortages.

''Thailand's high ranking is in part due to the fact that starting salaries for clerical jobs in Thailand are relatively low,'' he said.

''At the other end, bigger salaries are being used to bring in senior managers, often from overseas, due to a skill shortage here,'' he said.

Roland Ruiz, Hay managing director in Singapore for reward information in Asia, agreed that the lack of skills in the labour force for emerging Asian markets was producing the wide pay gap.

''Our analysis shows that the powerful growth of emerging Asian markets is outstripping the global supply of senior managers,'' he said.

''In Vietnam and China, there is a real lack of management talent. Pay is indicative of the premiums being paid to managers to attract and retain them. This trend is likely to continue as the Asian economy continues to enjoy positive growth.''

From 2005 to 2007, the gap did not narrow for countries such as India, China and Vietnam, due to strong economic growth.

The pay gap in the Philippines remained relatively constant due to strong unions, while Pacific countries such as Australia and New Zealand and developed Asian economies including Hong Kong, Singapore and South Korea also saw relatively little change.

But the Hay Group cautioned that the pay gap in Asia should widen over the next five years ''as the global war for top level management talent intensifies''.

Mr Ruiz said the widening gaps would have social and business implications for companies and policymakers.

''Governments may choose to impose minimum wage schemes or reform their tax structures in the short term, or invest in more education and training in the longer-term so as to spread the economic gains. All these will have implications on companies doing business in these countries,'' he said.

''The widening pay gap is also indicative of the wide divide in skills and capabilities between senior executives and clerical employees. Economic globalisation will continue to put competitive pressures on companies and governments to come up with the right mix of talent and compensation policy across the entire workforce spectrum.''

Mr Ruiz said governments face a challenge in balancing between ''having a globally cost-competitive work force and socio-economic equity''.

Companies meanwhile need to make strategic choices about their locations and parts of their business to best spend compensation dollars.

Vietnam to tap new energy source of gas hydrates

Vietnam will probe into gas hydrates, a new source of energy, found on seabed and continental shelf to replace the gradual exhaustion of its oil and gas reserves.

The exploitation of the solid mixture of hydro carbon, which looks like ice, will help Vietnam meet its long-term demand for gas and gas products, thus ensuring national energy security, local newspaper Vietnam News reported Monday.

Successful tapping of gas hydrates will also help strengthen research on environmental and climate change, and reduce risks in traditional exploration and exploitation of offshore oil and gas.

Vietnam's Ministry of Natural Resources and Environment has initiated a project to research this new kind of energy, which is included in the country's overall plan on marine resources exploration and management by 2010.

World gas hydrates reserves are very large, about twice that of other fossil types, the newspaper said. Vietnam has medium gas hydrates potential.

Source: Xinhua

Vietnam's WTO entry has many intital drawbacks

Price increases – reverse effects of WTO admission: expert
16:35' 27/08/2007 (GMT+7)

VietNamNet Bridge – The price increases in the last eight months, according to economist Pham Chi Lan, have been explained as reverse effects of Vietnam’s admission to the WTO due to shortcomings in the management of the national economy.

Price increases have had bad impacts on peoples' lives
The consumer price index (CPI) has increased by 6.78% through August, and 8.57% over the same period last year. The most worrying thing is that rural areas have exceeded urban areas in terms of CPI growth rate: in August, the CPI increase in rural areas was higher than that in urban areas, 0.6% vs. 0.5%. The continued price increases have negatively impacted peoples’ lives.

The price increases seem to come contrary to peoples’ expectations that prices would decrease as a result of WTO membership.

However, as Economist Pham Chi Lan, a former member of the Prime Minister’s Research Team, has pointed out, the price increases were expected. This is called one of the ‘prompt reverse effects’ occurring right after Vietnam has joined the WTO and signals the process of more deep integration into the world’s economy.

Mrs Lan said that WTO membership had brought both active and inactive effects. The active ones include the increasing investment flow into Vietnam, while the inactive ones include the price increases.

According to Mrs Lan, since becoming an official member of the WTO, the vulnerability of the national economy has become clearer. The links connecting Vietnam and the world’s market have become closer, i.e. the world’s market fluctuations have more direct impacts on Vietnam. Vietnam, for example, has been influenced by the oil price increases. It proves to be quite different from 1997, when the financial and monetary crisis occurred. At that time, the outside happenings did not have negative impacts on Vietnam.

As Vietnam has opened its market, the national economy has shown some shortcomings. As Vietnam’s management skills are not good, it finds it hard to control the market and prices.

Moreover, Vietnam still lacks necessary factors to run a market in which prices are defined purely by the supply and demand basis. Let’s take petrol price as an example. Enterprises did not lower the selling prices of petrol even when the world’s prices went down and the government asked them to lower prices. Mrs Lan said that in this case, it was because Vietnam did not have necessary market forces which could create healthy competition. Vietnam has 11 petrol distributors, including nine state owned, and Petrolimex alone holds up to 60% of the market share.

Mrs Lan said that in the short term, Vietnam would have to bear reverse effects of WTO membership, and the undesired effects would gradually disappear when Vietnam improved its management capability.

Vietnamese thugs shut down oil refinery construction

My comments:This is a huge problem in Vietnam and although there are far more reason to be in Vietnam than not to be, this is a reality and must be planned for. It goes all the way down to personal theft and intimidation of locals as well as expats.

Gov’t urges assaulted company to stay put, police to investigate

Bui Duc Nhan (left, sitting) signs a minute before being transported to Dung Quat police station early Sunday

A contractor applying to withdraw from Vietnam’s vital a billion-dollar oil refinery project due to violence at the site was urged by local authorities to continue its work at an urgent meeting held Monday.

One day prior, the transport ministry’s Bridge Company 12 had submitted a request to the Dung Quat Industrial Zone authority in Quang Ngai province to withdraw from its commitment to build a port pertaining to the new refinery after a string of assaults, robberies and threats were made against its workers.

The company said its 1,000 workers had been threatened and beaten by thugs who held grudges after employees stopped them from stealing construction materials.

Friday and Saturday, several Bridge Company workers were by some 20 thugs with knives and sticks. The hooligans drove motorbikes around the site and beat any worker they found.

We will not investigate,” said a communal police chief immediately after the incident.

Nguyen Xuan Hue, chairman of the Provincial People’s Committee [mayor] held the emergency meeting and instructed the police to investigate and ensure security at the site.

He also advised the company to abandon its pull-out to ensure progress.

For months, there have been reports of serious robberies at the site, a cause of major concern as Dung Quat is to be home to Vietnam’s first oil refinery, which is a billion-dollar must-have for the oil abundant nation that imports gas due to lack of such a facility.

Reported by Thai Anh, Hoang Thuyen - Translated by A.N.O.N

Story from Thanh Nien News
Published: 27 August, 2007, 20:43:39 (GMT+7)
Copyright Thanh Nien News

New international airport terminal in Saigon

New International Airport Terminal HCM City, Vietnam

Vietnam Airlines is pleased to announce the opening of the new International Terminal T2 at Tan Son Nhat airport in HCM City, Vietnam.

The new terminal will commence operation from Tuesday 28th August 2007. All International flights will arrive and depart from Terminal 2. Any passengers with onward domestic flights will be directed to the Domestic Terminal T1 for their flight.

Tan Son Nhat International Terminal T2 has the capacity to handle 8-10 million passengers yearly. The modern architectural design using natural light, double layered heat and sound insulated roofing to maximize energy savings.

New VIP and Business Class lounges and many new duty free shops, restaurants with Vietnamese and Western food, Beauty Salon, Massage Spa, Post Office & Money Exchange are located in the Terminal.

East-West Economic Corridor Week opens in Vietnam

The East-West Economic Corridor ( EWEC) week started Monday in Vietnam's central Da Nang city, which is expected to promote the corridor's potential, and attract more investors and sponsors, according to Vietnam News Agency.

"The EWEC week held at an international scale for the first time in Vietnam will help enhance understanding among peoples to strengthen friendly, solidarity and cooperative relations among countries in the corridor," Vietnamese Deputy Prime Minister Pham Gia Khiem said at the week's opening ceremony.

Countries in the 1,450-km EWEC, which goes through Vietnam, Laos, Thailand and Myanmar, should have more effective polices and measures to encourage tourism development, facilitate transport of goods, services and passengers, and create more favorable investment and trade environment, he said.

During the week hosted by the Vietnamese Ministry of Foreign Affairs from Aug. 27 to Sept. 2, there will be also an investment- trade-tourism forum, a caravan tour from Vietnam to Laos and Thailand, and many cultural and sports activities with the participation of some 400 officials and entrepreneurs from the four EWEC countries, Japan, China and a number of other countries, and some international organizations.

The EWEC was ratified at the 8th Ministerial Meeting of the Greater Sub-Mekong Region in 1998 with the main goals of enhancing cooperation, accelerating poverty reduction, narrowing development gaps, and strengthening economic linkages in the sub-region and Southeast Asia.

Main cooperation fields in the EWEC include transport, trade, tourism, energy, resources and land exploitation, environment cooperation and human resource development.

Source: Xinhua

Philippine banks explore Vietnam opportunities

Lucio Tan’s PNB joins Vietnam mission

By Jenniffer B. Austria

Two local banks will explore the possibility of setting up business in Vietnam.

Lucio Tan-owned Philippine National Bank and Yuchengco-controlled Rizal Commercial Banking Corp. are among the companies joining the four-day trade mission to Ho Chi Minh City in Vietman later this week.

The first Philippine-Vietnam business mission aims to promote bilateral trade and explore investment opportunities in both countries.

The Philippine mission will be led by Trade and Industry Undersecretary Thomas Aquino and will comprise top 50 businessmen engaged in various industries, including agribusiness and aquaculture, mining, energy, real estate and construction, light manufacturing, food manufacturing, banking and insurance.

The mission comes in the wake of a series of high-level meetings in the Philippines involving Vietnam and the Asean community, such as the recently concluded 40th Asean ministerial meeting and the visit of Vietnamese Prime Minister Nguyen Tan Dung, who was accompanied by a delegation of 40 top Vietnamese businessmen and industries.

Delegates will meet with top government officials of Vietnam, who will explain the procedures and regulations of doing business in that country. Filipino businessmen will also get the opportunity to meet and have a dialogue with their counterparts in their respective industries.

Vietnam has been the fastest-growing economy in the Pacific rim after China, with real gross domestic product growth averaging 8 percent in the past eight years.

Exports have also been growing at an annual average of 20 percent in the last two years, with total trade reaching $85 billion in 2006 alone. Vietnam also attracted $10 billion in foreign direct investments last year and is expected to get as much as $25 billion this year, which is 10 times higher than the goal of the Philippines.

Malaysia infrastructure company eyes Vietnam

Gamuda vying for big name in Vietnam

GAMUDA Bhd, which has made a name for itself in various infrastructure projects in Malaysia, the Middle East and Indo-China, is keen to make inroads in the booming construction, property and infrastructure markets in the region.

The group has set its sights on potential markets such as Vietnam and the Middle East.

Gamuda is actively pursuing RM15bil worth of new jobs locally and in other countries and the group is confident of clinching a few billion ringgit of new contracts by the end of the year.

Group managing director Datuk Lin Yun Ling is bullish on Gamuda's foray in Vietnam.

Datuk Lin Yun Ling
“We want to channel our expertise in building large infrastructure and property projects to other developing countries.

“We see our involvement in our maiden project in Hanoi as the start of our long-term participation in Vietnam's growth,” Lin told StarBiz.

Gamuda has teamed up with the Hanoi People's Committee to undertake the Yen So Park integrated development on 500 acres in the south of Hanoi.

Lin said the Vietnam project would provide “two bites of the cherry” for Gamuda – the construction bite was worth RM1.5bil in the first three years while the development portion of RM8bil would be over the next eight years.

The whole project involves setting up sewerage facilities, cleaning up the Yen So lake system, building a world-class public park and other supporting infrastructure costing RM1.5bil in exchange for the 500 acres of land for property development.

The Yen So Park project, which is Gamuda's first in Vietnam, is a prelude to more things to come for Gamuda in the country.

“Vietnam is short of roads, water, power, bridges and sewerage facilities. We believe that once Gamuda delivers the first three construction jobs – park development, relocation of electrical transmission towers and sewerage treatment works in Hanoi – there will be a platform for us to clinch other projects,” Lin told StarBiz.

Construction of the sewerage and park facilities would begin soon while property launches are expected from early next year.

The 500-acre site will be transformed into a new fully integrated central business district in Hanoi comprising high-rise office towers, 4- and 5-star international hotels, a convention centre, shop offices and residential components within a lake and park setting.

“It is like a big blank canvas for us to paint on – we will be creative and design products that will add value to the place.

“Our property development project will transform South Hanoi into a vibrant and modern hub, with clean and pristine lakefronts and lush green parks. It will also help to develop the neighbouring Hoang Mai and Thanh Tri districts,” Lin said.

The priority is to build up the park and the lake to attract attention to the place. The new park will be ready by 2010, in time for Hanoi's centennial celebrations.

“We expect Vietnam's tourism sector to take off strongly and there is a need for more international standard products and destinations. In this context, Yen So Park is a most timely project to add value to the country's tourism landscape,” Lin said.

He said the main challenge in pursuing more property projects in Vietnam was to locate the right land and partners as foreigners were not allowed to buy land for development but could lease the land user rights from state organisations with an average limited holding of 50 years.

Another way is to form a Vietnamese partnership in which a business partner contributes the land rights as a form of capital to the joint-venture company.

An analyst with a local brokerage said Gamuda might participate in two to three more property ventures collectively worth around RM6bil in gross development value in Ho Chi Minh.

“The next exciting project could be a new development in Long An that could generate a gross development value (GDV) of RM5bil,” he added.

Besides Vietnam, Gamuda has been pre-qualified for RM5bil worth of jobs in the Middle East.

In Qatar and Bahrain, it has an outstanding construction order book of RM1.6bil while contracts in Laos and Vietnam are worth RM3.4bil. In Malaysia, it also has projects in hand worth RM6bil.

Currently, it is constructing the RM1.8bil New Doha International Airport and the RM770mil Dukhan Highway in Qatar. It has commenced works on the RM640mill New Sitra Causeway bridges in Bahrain and started preliminary works for the RM1.9bil Nam Theun 1 hydropower project in Laos.

With the increasing number of overseas projects, Gamuda can look forward to strong double-digit earnings growth in the coming years.

Analysts said the inclusion of the RM1.5bil new infrastructure jobs from Vietnam has raised Gamuda’s current outstanding order book of RM9.7bil to RM11.2bil – the highest in the local construction sector.

Meanwhile, the RM8bil GDV from the development of Yen So Park would provide a new stream of property earnings for Gamuda over, at least, the next five years.

Tuesday, August 28, 2007

Vietnam wants Japan to facilitates major infrastructure projects

Vietnam has wanted Japan to help start implementing three Japanese-funded projects on building the Hoa Lac hi-tech zone in Hanoi, the north-south highway and railway routes as soon as possible, according to local newspaper People's Army Tuesday.

Vietnamese State President Nguyen Minh Triet made the statement when meeting with a visiting delegation of the Japanese Lower House, headed by Nikai Toshihiro, Chairman of the Japanese Liberal Democratic Party's Diet Policy on Monday.

Toshihiro said Japanese parliamentarians supported the three projects. He proposed the two sides that they should call for enterprises, especially Japanese small and medium enterprises to invest in the hi-tech zone.

Vietnam decided to prioritize using official development assistance for large-scale infrastructure development projects, considering them a foundation for high and sustainable economic growth in connection with poverty reduction in the 2006-2010 period.

The country also wanted to develop North-South routes, including express railways and highways, urban transport systems in Hanoi and southern Ho Chi Minh City, the East-West transport axis in the central region, and two economic corridors and the Beibu Gulf economic belt involving many Chinese and Vietnamese localities.

Ho Chi Minh City investment

Huge Hong Kong investment opportunities in Vietnam

Monday, August 27, 2007

US Export-Import bank offers full support for infrastructure projects in Vietnam

U.S. Ex-Im Bank interested in infrastructure projects

James H. Lambright (L), chairman and president of the Export-Import Bank of the United States, meets HCMC chairman Le Hoang Quan (R) at the City Hall yesterday. Lambright said his bank would provide partial or full support for Vietnam to develop infrastructure projects, such as routes 5 and 6 of the city’s subway systems. Senior vice president for export finance of the bank John A. McAdams said the bank encouraged Vietnam to use American products, technologies and contractors. On the same day, Lambright met leaders of the Southern Airports Authority (SAA). A source said the Long Thanh International Airport project in neighboring Dong Nai Province was on the agenda of the meeting. Today the delegation will leave the city for Hanoi where Lambright would have meetings with some ministries and Vietnam Airlines.

GE Energy upbeat on Thailand's growth prospects

GE Energy Thailand expects its business to enjoy double-digit growth this year due to a consistent increase in demand as well as the government's policies of supporting power generation and alternative energy.

While focusing on conventional users, the local business unit will in the years to come, with support from its US-based parent company, look for opportunities to bring in cleaner but more expensive technologies whenever Thailand is ready.

According to Kovit Kantapasara, the company executive who oversees the GE Energy business in Thailand and Vietnam, the business outlook remains bright. It is assumed that if a country's gross domestic product expands by 10 per cent, power demand will rise 14 per cent, at a 1:1.4 ratio. In Thailand, the growth rate could be higher as some old plants need to replace their machinery while Thailand is opening bids for new independent power-producers. Meanwhile, small plants are up and running, and many petrochemical plants, heavy energy-users, are located in Thailand.

"In Southeast Asia, GE Energy Thailand is the biggest in terms of revenue, fleet and the number of staff," Kovit said, though he declined to quote figures. The power-technology business is dominated by four companies, Siemens, Mitsubishi, Alstom and GE, but GE claims to be the one with the most complete portfolio of products.

"Our strengths lie in high-efficiency technology and equipment which promises low maintenance costs and high fuel savings. Our technology is competitive. The key is fuel efficiency, as 60 per cent of the cost of generating power is fuel while maintenance is only 5-6 per cent," Kovit said.

In its 15-year history, the company has been providing technology to the Electricity Generating Authority of Thailand, independent power-producers (IPPs), small power-producers (SPPs) and industrial plants. Kovit said 50 per cent of IPPs and 90 per cent of SPPs were running on GE equipment.

Recently the firm has begun penetrating alternative-energy sectors such as biogas and waste gas, with technology support from GE Jenbacher. About 10 silos, mostly involving tapioca flour and palm oil, are now running on power from biogas. Special tariffs for very small power-producers will also boost demand from the segment.

Kovit also foresaw the introduction of wind-power generation in Thailand in the next couple of years, with technology that GE has acquired from Enron. GE Energy is now looking for the best location for wind turbines. In seeking a business partner it expects a warm welcome due to the government's feed-in tariff of Bt2.50 per unit. "Wind power is now prominent elsewhere. We should see it in Thailand after 2009 when demand elsewhere slows and the products become cheaper."

He also has high hopes that in five to 10 years, GE will succeed in its research and development of new solar-power technology, which will shift its focus from the current silica-based systems. GE is looking for new materials that are cheaper and better at capturing heat.

While biogas is gaining prominence, GE Energy is also closely monitoring Thailand's moves towards the development of nuclear power plants. It is also ready to introduce coal-classification technology to Thailand if authorities require a specific type of coal for environmental protection. GE bought the technology from Chevron five years ago, but the expensive technology will be introduced only when Thailand is ready to shoulder the higher power rates involved.

"We have the right technology to support government policies, but we need to balance the use as power is a basic cost for industrial sectors. It is a factor that defines industrial competitiveness," Kovit said, adding that being in the business was a big challenge with everybody going for clean energy which needed clean technology.

Achara Deboonme

The Nation

Thai mall operator to build shopping complex in Vietnam.

27/Aug/2007 Intellasia | Thanh Nien | The Nation
Aug 27, 2007 - 7:06:00 AM

Thailand's biggest mall operator announced Friday it was finalising a joint venture with a local partner to develop a shopping complex in Vietnam. Central Pattana (CPN) said the Hanoi or HCM City complex, with 80-100,000 square metres of retail space, will be its first foreign foray. Construction would begin early next year and the complex will open by 2010.
If successful, the project “will become the model for developing retail complexes in other markets," said Naparat Sriwanvit, CPN vice president for finance. "There is huge potential in the Vietnamese market, as there is no large shopping complex in the country. Vietnam is also enjoying rapid economic development," she said.
CPN chief executive Suthitham Chirathivat said earlier that besides Vietnam, the company was considering doing business in India.

Hong Kong Airlines starts service to Saigon

Hong Kong Airlines starts service to HCMC

An aviation security vehicle guides a Boeing 737-800 airplane of Hong Kong Airlines into the parking area. Hong Kong Airlines last week opened the HCMC-Hong Kong weekly services with three flights a week on Mondays, Wednesdays and Fridays, and will add one more on Sundays from September 9. The two-hour-and-a-half flights will start from Hong Kong to Tan Son Nhat Airport at 10:30 a.m., and take off from Tan Son Nhat Airport at 11:15 a.m. Hongkong Airlines uses a 165-seat Boeing 737-800 airplane on the route.

Sunday, August 26, 2007

Vietnam shipbuilder ventures with Korean-based Songsan to build steel mill

A joint venture between Vietnam's state-run shipbuilder and a Korean firm will invest US$41 million in a steel mill in the northern port of Hai Phong. The Songsan-Vinashin joint venture between Vietnam's Vinashin and Korea's Songsan will build the steel mill on a 22.26 hectare site in Vinashin-Shinec Shipbuilding Industrial Park (SIP) with the capacity to produce 102,720 tonnes of steel annually.

The project is scheduled to begin in October and open in December 2009.

The mill would produce steel structures for shipbuilding yards, including Vinashin's, to replace imported products for use in the domestic industry. Vinashin, formally known as Vietnam National Shipbuilding Corporation, will shoulder 51% of the funds and rely on Songsan for the remainder.

The still mill in the port city is the second steel project by the Songsan-Vinashin venture, which is building a US$35 million factory in the neighbouring Hai Duong province.

The steel mill is set to come on stream in the second quarter of 2008 and Vinashin wants 60% of its steel to be sourced locally by 2010. Currently, only 30-40% of the company's steel is produced locally.

Vinashin said it needs 40 trillion dong (US$2.5 billion) to reach US$1 billion in ship exports by 2010.

Formed last year and run by Vinashin's Shinec affiliate, the Shipbuilding Industrial Park (SIP) has attracted several major projects, including a joint venture between Vinashin and Finland's Mac Gregor group as well as a US$100 million project by the Swedish company IKEA.

The park will be home to a US$12 million car assembly factory, thanks to a joint venture between the German automaker Volkswagen and Shinec. A 15 hectare wharf able to receive freighters of up to 6,500 tonnes will also be built at the park as well as offices, a trade centre and a luxury apartment complex. The park offers many incentives, including low land rent rates for investors who sign land lease contracts before December 2007 as well as assistance for customers in workforce training and other fields.

Vietnam to post bigger coffee export revenues in 2007

Vietnam is expected to gain coffee export turnovers of 1.5 billion U.S. dollars this year, up from 1. 1 billion dollars last year, according to local trade agency on Friday.

The hike is attributed to higher coffee prices in the world market, which stands at 1,430 dollars per ton on average in 2007, compared with 1,066 dollars in 2005, said the Trade Information Center under the Vietnamese Ministry of Trade and Industry.

Vietnam, the world's second biggest coffee exporter after Brazil, is diversifying coffee products for export, partaking more actively in international coffee trading floors, and applying more advanced farming and processing techniques.

The country shipped abroad 893,000 tons of coffee worth over 1. 3 billion dollars in the first seven months of this year, posting respective year-on-year surges of 56.6 percent and 102.1 percent.

Source: Xinhua

Saturday, August 25, 2007

Seaport development plan weighs anchor on growth

The domestic seaport system remains underdeveloped and under used, with many ports operating without necessary infrastructure, according to Government officials.

To improve profits in the marine sector, the Government has developed a seaport development plan that is expected to add substantially to economic growth.

Along Viet Nam’s 3,200 km coastline there are more than 100 seaports – 14 of which are crucial to the country’s economic development.

However, none of the domestic seaports can receive medium-sized vessels of 50,000 DWT (dead weight tonne) or 2000-TEU container unit, according to Ho Kim Lan, general secretary of the Viet Nam Seaports Association (VSA).

Experts say seaport development is ad hoc.

The northern region alone has Hai Phong port and Cai Lan deep water port, while two more ports – Lach Huyen and Hai Ha – are planned for Quang Ninh province. These last three ports will be within 100 kilometres of each other.

A similar situation is seen in the central region, which in the 1990s had just two ports – Da Nang and Quy Nhon. Now, however, there is Nhon Hoi port, which is close to Quy Nhon and just 200 km from Dung Quat, which is under construction.

Meanwhile, Chu Lai Open Economic Zone has the Ky Ha deepwater port. Da Nang has the Tien Sa deep water port and Thua Thien-Hue province the Chan May deepwater port.

Due to the density of seaports and the limited supply of goods, most do not run at full capacity, resulting in significant losses.

Experts also blame poor design and a lack of accountability for the industry’s inefficiency.

Cai Lan port in Quang Ninh province, for instance was originally planned to welcome 50,000-tonne ships and 3,000 TEUs but is only able to serve ships of 10,000-20,000 DWT.

Cai Lan Port Deputy Director Nguyen Quang Dao said: “Although the water line at the Cai Lan Port is at a level that allows the entry of 50,000-tonne ships, the depth of passage to the berth is capable of handling vessels less than 25,000 tonnes. Others have to dock at distant trans-shipment points.”

“Trans-shipment costs 7 USD for each tonne of goods, resulting in a loss of hundreds of billions of dong after three years of putting the port into operation,” Dao said.

Dredging the Cai Lan port’s 7.5 km passage will cost up to 300 billion VND (18.8 million USD), he said.

There are similar problems at Cai Cui port in Can Tho City and the Dinh Vu port in Hai Phong.

The limited size and shortage of infrastructure at seaports means that goods travelling from Viet Nam to major international markets such as the US and the EU have to be trans-shipped to larger ports, such as Hong Kong and Singapore. The additional handling costs offset Viet Nam’s lower labour costs.

A 40-foot container carrying cargo to Los Angeles from Hong Kong for example costs 28 percent less than when it is shipped from HCM City.

According to general director of Viet Nam National Shipping Lines (Vinalines) Mai Van Phuc, around 80 percent of the domestic marine transport market is conducted by foreign merchant shipping.

This also affects supplies of logistics-related services, which could theoretically create profits worth dozens of billion of US dollars a year, Phuc said at a recent seminar.

“Viet Nam alone each year has to spend about 8 –11 billion USD for logistics services, nearly 60 percent of which is for marine transport-related services,” he said.

Nguyen Ngoc Hue, deputy director of the Viet Nam National Maritime Department, said: “The most effective way to avoid the scattered investment situation is to have a professional seaport development scheme that has a strategic vision of some dozens of years ahead. Seaport planning must include details for the rear of ports, and must have transparent feasibility.”

Nguyen Van Tiem, the former director of the Viet Nam Ocean Shipping Company (Vosco), said the marine transport industry must go public, and that State companies should be equitised.

Domestic enterprises involved in marine transport should join forces with each other to better compete with foreign rivals, Tiem added.

Thailand, Burma discuss gas pipeline

SINGAPORE – Thailand and Myanmar have discussed a possibility of a joint venture for an investment in a marine pipeline construction to supply more natural gas from the M-9 field located in Myanmar.

Thai Energy Minister Piyasvasti Amranand, who is attending the 25th ASEAN Energy Ministers Meeting here, said he had discussed with his Myanmar counterpart progress in negotiations for natural gas trading between Thailand and Myanmar through a joint venture.

He said PTT Exploration and Production Plc expected it would be able to supply natural gas from the M-9 field to Thailand in late 2011 or early 2012 to accommodate higher power demand in the country.

The field has a gas reserve of more than 1.5 trillion cubic feet and is able to supply gas at a rate of around 300 million cubic feet per day.

The M-9 field development project is expected to require a total investment of US$1 billion.

Since PTTEP wants to invest in energy fields in other countries, it has invited foreign partners to join the project.

Of late, the state-owned Oman Oil Co had agreed to hold a 5 per cent stake and the Myanmar government was given the right to hold 15 per cent.

PTTEP will be the major shareholder with at least 30-40 per cent with the remaining stake to be held by other partners.

"Both countries want to see the project get off the ground as soon as possible to accommodate the increasing power demand.

"Although it remains difficult to install a marine pipeline," he said, "we believe the project will definitely be implemented in the future." (TNA)

Friday, August 24, 2007

11,000 HCM City company start ups in Jan-Aug

24-AUG-2007 Intellasia | Kinh Te Vietnam & The Gioi page 5
Aug 24, 2007 - 7:05:00 AM

Over 11,000 new private companies were registered in January-August with total capital of 83 trillion dong (US$5.1 billion), of which 1,710 joint stock companies or 15.5% but accounting for 77.3% of registered capital, according to HCM City's Department of Planning and Investment.

In August, another 1,737 company start ups were established with the capital of 11.7 trillion dong.

In 2000, the city registered only 4,600 new companies and the figure grew to 50,000 in 2005.

HCM City now has 110,000 private companies capitalised at 415.19 trillion dong.

Hoa Phat to go public in September

24-AUG-2007 Intellasia | Dau Tu Chung Khoan page 5
Aug 24, 2007 - 7:03:00 AM

Hoa Phat Group with a chartered capital of 1.32 trillion dong plans to list 132 million shares via the southern securities transaction floor in September, said Tran Dinh Long, board of directors' chair of Hoa Phat group.

Long added, during the first half of the year, Hoa Phat reached revenue of 2.383 trillion dong and 254 billion dong in after tax profit compared with the year's target of 420 billion dong.

Recently, Hoa Phat finished offering 22 million shares to strategic shareholders and raised its chartered capital from 1.1 trillion dong to 1.3 trillion dong.

The surplus capital of nearly 1.3 trillion dong from the share issue is set aside for investing in ongoing projects such as building offices for rent, new urban zone and cement factories.

Rising baht bites hands that feed Thai exports

von Amy Kazmin

Economists argue that Thai companies ought to adjust to the strong currency by improving productivity.

Thai Silp South East Asia, a Thai garment exporter with 5,000 workers, had been struggling financially ever since it lost one of its biggest customers last year. But last week, as the Thai baht surged against the dollar, Thai Silp's owners seemed just to give up, locking their doors overnight and startling workers who turned up the next day to find the factory seemingly abandoned.

After angry workers blockaded the road to the airport - and under intense pressure from the government - Thai Silp reopened its doors a day later, with vague promises of state help to obtain fresh bank credit. But the shutdown raised growing concerns about the vulnerability of Thailand's labour-intensive export industries to the recent rapid appreciation of the baht to levels not seen since the 1997 onset of the Asian financial crisis.

After strengthening about 12 per cent against the dollar in 2006, the baht has risen a further 6 per cent this year, surging 3 per cent in July to hit 10-year highs.

Amid howls of anguish from exporters about the impact of currency volatility, the Bank of Thailand yesterday cut its key policy rate by 25 basis points to 3.25 per cent, while promising to ease curbs on capital outflows by Thai investors. The finance ministry also said it would refinance domestically or repay ahead of schedule an estimated $3.1bn (Euro2.2bn, Pfund1.5bn) in external debt by the end of the year to ease currency pressure.

Analysts do not expect the measures significantly to reduce what they say is long-term upward pressure on the currency, particularly while Thai import growth remains weak. But, like others taken by Thai authorities in recent weeks, the steps are symptoms of serious unease in the military-led government that took power in a coup last year, about the baht's strength.

"There is heaps of political pressure and they [the central bank] can't sit still," says Sriyan Pietersz, head of research at JPMorgan. "They have to be seen to be doing something."

Economists argue that Thai companies ought to adjust to the strong currency by improving productivity. But that is something many exporters have not had to do since the baht's devaluation in July 1997.

Thailand's overall export growth has not yet been heavily affected by the baht's rise. Many higher-value export industries - such as cars and electronics - contain a big proportion of imported components that have become cheaper as a result of the baht's strength, helping to offset rising local labour costs. But the surging currency is adding to the pressure on labour-intensive, low-cost industries such as textiles, already confronting increasing competition from rivals such as China.

Thai authorities have urged companies to reduce domestic costs and improve efficiency. But businesses complain that the baht's rate of appreciation is outpacing their ability to overhaul operations, and say authorities should do more to help.

"Instead of telling the entrepreneurs and companies in Thailand to keep changing and adapting, we have to throw back the question to the government and the Bank of Thailand: how good are they in adapting and changing their strategy and tactics to cope with the problem?" says Dej Pathanasethpong, president of the Thai Garment Manufacturers Association.

Vietnamese PM kicks off Myanmar visit

Naypyidaw (VNA) - Prime Minister Nguyen Tan Dung and his wife arrived in Myanmar on August 14 to begin his official visit to the country.

Upon his arrival, PM Dung paid a courtesy visit to Sr. Gen. Than Shwe, Chairman of the State Peace and Development Council and held talks with Acting Prime Minister Sen. Lieu. Gen. Thein Sein.

At the talks, the two leaders spoke openly on their countries' respective socio-economic environment.

The Acting Myanmar PM went on to laud the policies on renewal, external relations, regional and international integration that Viet Nam has pursued.

Mentioning Viet Nam 's growing prestige in the region and world arena, the Myanmar leader expressed his belief that the country would become an industrialised country by 2020.

PM Dung told his host that he was pleased to know that Myanmar has gained initial good outcomes in the roadmap to securing a seven-point democracy and successfully organised a national congress in July to prepare for the promulgation of a new constitution and the organisation of a general election.

The Vietnamese leader said he hoped the Myanmar people would continue to advance steadily on the road to secure peace, national reconciliation, sustainable development, stability and prosperity.

The two leaders were satisfied with the friendship and cooperation that the two countries have enjoyed over the past 32 years and discussed ways to expand upon the relationship.

An emphasis was placed on the organisation of the sixth session of the Viet Nam-Myanmar Joint Committee and increasing trade, oil and gas, transport, communications, post and telecommunications, agriculture, health, culture and education and training ties.

On trade, the two leaders said there remains much room for growth although they were satisfied with the 20 percent growth rate in two-way trade in 2006.

The two leaders praised the signing of an agreement on a strategic partnership between the Viet Nam Oil and Gas Group and the Myanmar Energy Ministry during this visit, describing it as a new development step in the two countries' economic cooperation.

They were happy with the Vietnam Airlines' plan to launch a Ha Noi-Yangon direct air route in November to cater for the increased tourism demand between the two countries.

At the talks, the Myanmar officials pledged to create favourable conditions for the Viet Nam Military Telecommunications Corporation, Viettel, to invest in telecom services in their country.

On regional and international issues, the two leaders shared the view that the two countries have coordinated closely at multilateral forums, such as ASEAN, Cambodia-Laos-Myanmar-Viet Nam cooperation programme, ACMECS, the Greater Mekong Subregion (GMS), the East West Economic Corridor (EWEC).

They both lauded the outcome of the ACMECS Foreign Ministers' Meeting held in Myanmar in May and the preparations for the third ACMECS Summit slated for Viet Nam in October this year.

The two leaders expressed their determination to lift the two countries' friendly and multi-faceted cooperation to a new height for the sake of mutual benefits and for peace, stability, cooperation and development in Southeast Asia and the world.

Following the talks, PM Nguyen Tan Dung and Acting PM Thein Sein witnessed the signing of a contract to explore and exploit oil and gas in Myanmar between the Viet Nam National Oil and Gas Group and the Myanmar Oil and Gas Group.

In the evening, Acting PM Thein Sein and his wife hosted a banquet in honour of PM Dung, his wife and other entourage.-Enditem

Vietnam-U.S. venture eyes oil refinery in Vietnam

A joint venture between a Vietnamese joint stock company and the U.S.-based Semtech Ltd is completing an investment report on building an oil refinery in Vietnam's southern Can Tho city.

The venture plans to construct the refinery with annual processing capacity of two million tons in the city's O Mon Industrial Park, according to local newspaper Vietnam Industry.

The construction of Vietnam's first oil refinery started in central Quang Ngai province in November 2005. Capitalized at some 2.5 billion U.S. dollars and expected to become operational in late 2008 or early 2009, the Dung Quat refinery with an annual refining capacity of 6.5 million tons of crude oil is of significance in ensuring energy for the country, said Vietnam's National Oil and Gas Group PetroVietnam the project's investor.

Vietnam is making preparation for the construction of its second oil refinery named Nghi Son in central Thanh Hoa province. The Vietnamese government has recently approved a plan on constructing the third oil refinery with annual processing capacity of at least 7 million tons in southern Ba Ria Vung Tau province.

Japan leads a corporate shift to Vietnam in its hunt for cheaper labour

From high-tech consumer electronics and solar panels to bathroom tiles and tanker hulls, corporate Japan is leading an Asian manufacturing switch from China to Vietnam, Eastern Europe and South America in its relentless hunt for lower labour costs.

It is Japan to which the eyes of manufacturers around the world are now turned. For years, living in fear of a “hollowing-out” of its production skills, the world’s second-largest economy has staunchly resisted letting too much of its output seep overseas. Now, faced with the mass retirement of baby-boomers and low fertility rates, Japan has been forced to outsource. Analysts believe that the choices made by its largest companies – such as Canon, Toyota and Mitsubishi – will inform decisions of major corporations elsewhere.

Japan has already gained a useful feel for the way that global manufacturing is tending. As the world’s largest producer of machine tools – it set a record last year of Y1.43 trillion (£5.82 billion) – Japan has a unique view on where production is being set up. In Europe, for example, the pursuit of cheaper labour costs can be seen as machine tools head towards Romania, Bulgaria, Slovenia and Hungary.

Although Japanese direct investment in China remains substantial, at just under $4.5 billion (£2.25 billion) last year, Japan Inc’s interest in using China as its workshop was contracting long before TTI redrew its plans for further investment there. For while China remains a huge resource of cheap labour, the advantages of other Asian hubs – in terms of transport and energy infrastructure, proximity to major trade routes and availability of materials – have begun to shine.

Japan’s investment in China in 2006 was more than 30 per cent lower than in 2005, and it is expected to fall another 30 per cent this year.

As Japan’s industrial giants – from a wide range of sectors – make their choices, they are forcing huge changes in their parts supply chains. So as Nissan and Toyota set up factories in Brazil and Russia, the companies that make tyres and exhaust pipes must do the same.

In electronics, the Philippines and India are becoming more attractive, with Fujitsu and NEC building huge armies of engineers in those countries.

Towering over corporate Japan’s recent strategic rethink is the economic rise of Vietnam. Vietnamese workers earn average monthly pay of about $80 – half that of a Chinese worker and just a fifth of what a domestic Japanese would cost. However, Japanese companies say there is more to the shift than cheap labour. They began to invest heavily in Vietnam after the Sars crisis of 2003, which, for a while, appeared to threaten the viability of Japanese factories in China. The military coup in Thailand last year has also forced the Japanese to reconsider projects there.

Japanese chief executives, whose 2006 investments in Vietnam were twice those of the previous year, at $1.3 billion, believe that the Vietnamese work ethic is closer to Japan’s, in terms of a strong belief in quality.

Even before China Inc’s image as a manufacturer was tainted by recent scandals of toxic toys and shoddy food products, Japanese bosses have privately been saying that they “trust” Vietnamese workers over their Chinese counterparts. Thus, Yamaha has unveiled plans to boost motorcycle capacity in Vietnam to 700,000 units per year, Canon now assembles photocopiers there, and IHI has shifted its ship-design operations to the port of Hai Phong. Toshiba has also set up R&D operations in Vietnam, a project that it would be reluctant to take to China.

Japan’s largest trading house, Mitsui, has just set up a subsidiary in Hanoi. “Vietnam,” the subsidiary’s president, Ken Ozeki, recently told Japanese media, “could become even more reliable than China or India.”