Vietnam to get first private airline-VietJetAir

Hanoi (dpa) - Vietnam's Prime Minister Nguyen Tan Dung has given the go-ahead to issue a licence to the country's first private airline, VietJetAir, Transportation Ministry officials confirmed Friday.

"The prime minister has agreed in principle" to allow the company to operate, and assigned the Transportation Ministry to prepare the legal documents, senior ministry official Nguyen Van Cong said.

Domestic flights are currently provided exclusively by the government-owned flag carrier Vietnam Airlines, and its wholly-owned subsidiary Pacific Airlines. Tour operators and travelers have long complained about the absence of alternatives.

VietJetAir public relations' officer Robert Hugh said the company expected to launch operations within about one year. He said the delay would be due to a shortage of available aircraft to lease.

Hugh said the company would be a low-cost, short-haul carrier, serving domestic and some regional routes.

"Our strategy will be to go after overpriced or under-served routes, and there are quite a few available," Hugh said. "Hanoi to Siem Reap is very expensive. Hanoi to Hong Kong is both overpriced and under-served."

Tourism industry experts say there are too few operators in Vietnam to meet rising demand on domestic routes.

"Tour operators in Vietnam often have to book tickets very long in advance due to the limited number of planes," said Vu The Binh, head of the Travel Department in Vietnam's Administration of Tourism. "Vietnam needs as many more domestic airlines as possible."

The new company will have a licensed capital of 600 billion Vietnamese dong, about $38 million.

Vietnam's Climate and Weather

Overview Climate
Source by : WWW.HANOIPEACETOUR.VN
Vietnam is located in both a tropical and a temperate zone. It is characterized by strong monsoon influences, but has a considerable amount of sun, a high rate of rainfall, and high humidity. Regions located near the tropics and in the mountainous regions are endowed with a temperate climate.
The monsoon climate also influences to the changes of the tropical humidity. In general, in Vietnam there are two seasons, the cold season occurs from November toApril and the hot season from May to October.The difference in temperature between the two seasons in southern is almost unnoticeable, averaging 3ºC. The most noticeable variations are found in the northern where differences of 12ºC have been observed. There are essentially four distinct seasons, which are most evident in the northern provinces(from Hai Van Pass toward to the north): Spring, Summer, Autumn, and Winter.
Every year there are 100 rainy days and the average rainfall is 1,500 to 2,000mm. The humidity ranges around 80%. The sunny hours are 1,500 to 2,000 and the average solar radiation of 100kcal/cm2 in a year.
Because Vietnam is affected by the monsoon, that why the average temperature is lower than the other countries which are located in the same longitude in Asia. The annual average temperatures range from 22oC to 27oC.
In comparing with these countries, the temperature in winter is colder and in summer is less hotter in Vietnam.
Under influence of monsoon, and further because of the complicated topography, the climate in Vietnam always changes in one year, between the years, or between the areas (from North to South and from low to high). The climate in Vietnam is also under disadvantage of weather, such as typhoons (advantage there are 6-10 storms and tropical low atmosphere in year, floods and droughts are threaten the life and the agriculture of Vietnam).

Hanoi
In Hanoi there are four distinct seasons: Spring, Summer, Autumn, and Winter. But it is able to be divided into two main seasons: the rainy season from May to September (it’s hot, heavy rain), and the dry season from October to April (it’s cold, little rainfall). The annual average temperature is 23.2oC, but in winter the average temperature is 17.2oC. The lowest temperature ever recorded was 2.7oC in 1955. The average summer temperature is 29.2oC, with the highest ever recorded being 42.8oC in 1926. On average, there are 114 rainy days a year with around 1,800mm of rainfall.

Haiphong
It's one province in the North then Haiphong is influenced by a tropical monsoon climate too. There are 4 seasons and the annual average temperature is between 23oC and 24oC. Rainfall total is between 1,600 and 1,800mm. The weather is warm throughout the year.

Quang Ninh
The climate is symbolic of the climate of North Vietnam; featuring all four seasons. In summer (from May to September), it's hot, humid and rainy, while monsoons flourish. In winter (from October to April), it's cold, dry, and sees little rainfall.The average temperature is over 25oC. Annual rainfall totals between 1,700 and 2,400mm.

Thua Thien Hue
It features a tropical monsoon climate, featuring all four distinct seasons: spring, summer, autumn and winter. The spring is cool and warm, the summer is hot, the autumn is cool and the winter is cold. Average temperature is 25oC. The best time for tourists is from November to April next year.
It features a tropical monsoon climate, featuring all four distinct seasons: spring, summer, autumn and winter. The spring is cool and warm, the summer is hot, the autumn is cool and the winter is cold. Average temperature is 25oC. The best time for tourists is from November to April next year.

Danang
Its climate is tropical, with two distinct rainy and dry seasons. The average annual temperature is between 28oC and 29oC, and storms hit the area every year in September and October.

Khanh Hoa
The climate here is oceanic tropical monsoon, but is quite mild. The average annual temperature is 26.5oC. Annual rainfall totals over 1,200mm.
Lam Dong
The climate here is cold, with an average annual temperature of 18oC. Dalat is a city town, the climate is temperature and there are the beautiful natural landscapes with the waterfalls, lakes and pine groves, and is well known as Vietnam’s flower city.

Ho Chi Minh City
The climate is divided into two seasons, with the rainy season lasting from May to November. The average annual temperature is 27.5oC without winter, and yearly rainfall totals 1,979mm. Tourism is convenient for all 12 months of the year.

Ba Ria-Vung Tau
The climate here is tropical monsoon. The average annual temperature is 27oC, rarely stormy, rich in sunshine. Vung Tau is without winter so resorts can active throughout the year.

RESOURCES
Vietnam has a variety of mineral resources. Located beneath the subsoil are precious stones, coal and valuable minerals such as tin, zinc, silver, gold and antimony. Vietnam also has large deposits of oil and gas on its offshore islands and on the mainland.
Vietnam also has abundant subterranean mineral water sources. These are found at Quang Hanh in Quang Ninh, Hoi Van in Binh Dinh, Vinh Hao in Binh Thuan, Duc My in Nha Trang, Kim Boi in Hoa Binh, and Binh Chau in Ba Ria -Vung Tau.

TOPOGRAPHY
Three quarters of Vietnam's territory consists of mountains and hills. Vietnam is divided into four distinct mountainous zones.
The Northeasten Zone ( Viet Bac )
This zone stretches from the Red River Valley to the Gulf of Tonkin. The mountainous area of Viet Bac is scattered with famous sights: Dong Nhat Grotto, Dong Nhi Grotto, and Tam Thanh Grotto in Lang Son Province; Pac Bo Grotto and Ban Gioc Waterfall in Cao Bang; Ba Be Lake in Bac Kan; Yen Tu Mountain and Halong Bay in Quang Ninh; and Tay Con Linh, the highest mountain peak in the region reaching 2,341 meters above sea level.

The Northwestern Zone
This zone is comprised of mountains that run from the north of the Sino-Vietnamese border to the west of Thanh Hoa Province. This magnificent mountain range is nationally known for its resort town of Sapa in Lao Cai Province, which is perched 1500 meters above sea level. Several ethnic groups, such as the H'mong, Dao, Kinh, Tay, Giay, Hoa, and Xa Pho, still reside in this region.
The northwestern zone is also famous for the historical site of Dien Bien Phu and Fansipan Mountain, which measures 3,143 meters above sea level at the peak.

The North Truong Son Zone
This zone runs from the western part of Thanh Hoa Province to the Quang Nam-Da Nang Mountains. This region is known locally for its picturesque Phong Nha Grotto and its two breathtaking passes, the Ngang Pass and the Hai Van Pass. It is also known worldwide for being the location of the legendary Ho Chi Minh Trail constructed during the second great resistance war.
The South Truong Son Zone
This zone is located to the west of the south central coast provinces.Behind these huge mountains is a vast area of red soil known locally as "Tay Nguyen" (the Central Highlands).There are numerous legendary accounts of the flora and fauna and of the lives of several different ethnic minorities living in the Central Highlands. Dalat, established during the 19th century, is a popular resort town in this part of Vietnam.
Vietnam has two major deltas, including the Red River Delta in the north and the Mekong River Delta in the south.

The Red river delta
This region stretches for15,000 sq. km. Over time, deposits of alluvium carried from the Red River and Thai Binh River have accumulated to form the delta. The ancient Viet people settled at the junction of the two rivers . At that time, the wet rice civilization was established

The Mekong River Delta, or Southern Delta
This region is approximately 40,000 sq. km. The land is very fertile and has favorable climate conditions for agriculture. As a result, it is the largest rice growing region in Vietnam.Vietnam is crisscrossed by thousands of streams and rivers. There is a river discharging every 20 kilometers along Vietnam's coastline. The waterways are a very convenient means of transport with major rivers like the Red River in the north and theMekong River in the south.

Sea
Vietnam's coastline is 3,260km long. If you have a chance to travel along the coast of Vietnam, you will be able to enjoy the beautiful beaches of Tra Co, Sam Son, Lang Co, Non Nuoc, Nha Trang, Vung Tau, and Ha Tien. In some places, you will see mountains jutting out to the sea. One such magnificent site is Halong Bay, which has recently been listed as a World Heritage Site by UNESCO.
Vietnam's coast has been awarded a series of large seaports, such as the ones at Haiphong, Danang, Qui Nhon, Cam Ranh, Vung Tau, and Saigon. There are thousands of islands and islets scattered offshore from north to south. Among the most popular tourist destinations are the Truong Sa and Hoang Sa Archipelagos.

Forest
The forests of Vietnam account for most of the total land area. National parks are preserved by the state and follow a steady development plan. Some of the more famous national parks located throughout the country include Ba Vi in Ha Tay, Cat Ba in Haiphong, Cuc Phuong in Ninh Binh, Bach Ma in Hue, and Cat Tien in Dong Nai.

For other information , Please visit at : WWW.HANOIPEACETOUR.VN

Czech labour shortage forces Skoda to recruit workers from Vietnam

Christine Buckley, Industrial Editor

Skoda has begun to recruit workers from Vietnam for its factories in the Czech Republic as it struggles with a labour shortage.

The Czech carmaker is having to search further afield for employees amid increased migration of Eastern European workers and a booming domestic automotive industry.

Skoda, which is owned by VW, has used an employment agency to recruit several hundred workers from Vietnam, whom it regards as disciplined and attentive to detail.

A spokesman said: “We have a shortage of labour so we are using employment agencies to bring in staff. Vietnam is one of the areas we are bringing people from. We would rather find people close to home and it is a long way for them to come, but until we can find the right people nearer home this is what we will have to do.”

It is not the first time that workers from Vietnam have moved to the Czech Republic. When the country was under communist rule as Czechoslovakia, Vietnam, also under communist control, and Cuba sent workers in return for arms and heavy engineering goods.

Many stayed in Czechoslovakia after the overthrow of communism in 1989 and set up small businesses. Now the Vietnamese are the third-largest immigrant group in the Czech Republic, behind Ukrainians and Slovaks.

Skoda, which has been steadily repositioning itself in the car market as more of a value brand, is one of the Czech Republic’s biggest employers. It has more than 27,000 workers in its three factories.

The open-borders policy of the European Union means that it is suffering recruitment problems. Many Czech workers have left for better paid jobs in Western Europe. Additionally, those from the neighbouring countries of Poland and Slovakia, which traditionally have made up the majority of foreign workers in the Czech car industry, are also choosing to go further or to take jobs in their own growing automotive industries.

The Czech Republic’s automotive industry employs more than 120,000 people, an increase of 40 per cent on 15 years ago. A number of Western carmakers have built factories in the country in recent years because of its lower labour costs and its central location in Europe.

Skoda’s own production, which includes some output from a factory in China, is set to exceed 640,000 vehicles this year. In 1994, the Czech company, which is more than 100 years old, produced only 173,000 vehicles. The carmaker believes that it can make one million cars in the forseeable future.

The Czech Republic is trying to make it easier for more migrant workers to settle in the country so that it can maintain a decent labour pool. It intends to issue green cards for workers outside the European Union that will combine rights for residency and work permits.

Vietnam’s emerging automotive industry and its broader economy are being closely watched for evidence that the country could be the next China in terms of rapid industrial growth. This year it became the 150th member of the World Trade Organisation. Its car industry is still young because traditionally Vietnam imported virtually all of its vehicles from communist Eastern Europe.

However, Japanese carmakers, such as Toyota, Honda and Mitsubishi, began to move into the country in the mid-1990s, producing cars in partnership with Vietnamese businesses.

Facts to boot

–– Skoda was founded in what is now the Czech Republic in 1895 and started to produce cars in 1905 and lorries in 1924

–– It was bought by the Volkswagen Group in 1991 after the collapse of the Soviet Union

–– Skoda had revenues of € 6.64 billion (£4.73 billion) and a workforce of nearly 27,000 in 2006

Vietnam officially chosen to host Miss Universe 2008

HANOI, Nov. 28 (Xinhua) -- Vietnam has been officially chosen to host the 57th Miss Universe in central Nha Trang city of Khanh Hoa province next July, local newspaper Youth reported Wednesday.

The contract on holding the event was signed Tuesday between the Vietnamese main partner, the Hoan Vu company, and the pageant's organizer under the witness of representatives of the Vietnamese Ministry of Culture, Sports and Tourism, the provincial People's Committee, Miss Universe 2007 Riyo Mori and Miss Vietnam 2007 Mai Phuong Thuy.

The event's final round will be organized at the Diamond Bay Resort in the coastal city.

U.S. billionaire Donald Triumph, owner of Miss Universe contests, will attend the final of Miss Universe 2008.

To host the event, Vietnam is estimated to spend some 15 million U.S. dollars covering the pageant's royalty, and manpower and infrastructure expenses.

Vietnam will focus on constructing a 7,500-seat stage, upgrading the Cam Ranh airport and some hotels in Khanh Hoa, and beautifying the sea city.

Vietnam attracts $15 Billion in foreign investment in 2007

Hanoi (dpa) - Vietnam has attracted a record $15 billion in foreign direct investment so far this year, up nearly 40 per cent from the same period last year, an official said Tuesday.

The amount strengthened booming Vietnam's reputation as the new Asian magnet for investment, thanks to low wages, high literacy and a youthful population.

Of the fresh capital, more than $13 billion come from 1,283 newly licensed projects and the remainder from the expansions of existing projects, said Phan Huu Thang, director of the Foreign Investment Department under the Ministry of Planning and Investment.

"Most of the new projects invest in services and technologies," Thang said, adding that investors from Asia make up most of the fresh investment capital.

South Korea took the lead with $3.68 billion, or 24.5 per cent of the total of newly registered capital, followed by the British Virgins Islands with $3.5 billion, Singapore with $1.55 billion and Taiwan with $1.14 billion.

"The figures show that Vietnam is becoming a more attractive destination in Asia for foreign investors," Thang said.

Thang forecast that the total inflow into Vietnam would exceed $16 billion this year, a substantial jump over the initial target of $13 billion.

Escaping to Binh An Village in Vung Tau

A view of Binh An Village Vung Tau from the beach. On clear days, the windows of the village’s restaurant (R) will open for guests to enjoy the sea breeze At first glance, there is noth-ing special about Binh An Village in Vung Tau City. A wooden sign emblazoned with the resort’s name and a green fence that camouflages the resort is all one initially sees upon entering. However, what lies beyond the gates is much more interesting. Binh An is nestled close to the versant for protection on one side, while the other is contiguous to the beach. Inspired by the ancient Vietnamese style of external architecture, the resort features wooden houses, stone steps and green space filled with grass and trees. Some of Binh An’s buildings are constructed onto rocky cliffs close to the beach. The resort’s ambiance is peaceful and quiet with nothing to keep visitors from enjoying the sunshine, the sounds of crashing waves and the constant sea breeze. The resort’s rooms located on the versant are given special Vietnamese names with special meanings such as Hoi An, Phu An, Long An, Nam An and Dong An. Hoi An, Phu An and Long An are villas with views of the sea that are priced at US$250 per night. The other rooms are less expensive. On clear days, visitors can enjoy a beachside massage or catch small oysters as the tide ebbs away. Address: 1 Tran Phu Street, Vung Tau City, Baria-Vung Tau Province. Tel: (064) 510 016. Minh Duy

Hong Kong, Vietnam stock regulators to ink deal next year

Professor K. C. Chan (C), Secretary for Financial Services and the reasury of the Government of the Hong Kong Special Administrative Region, tours Vietnam’s southern bourse as part of his visit to establish ties between the securities markets of Vietnam and Hong Kong By THUY TRIEU (SGT-HCMC) Securities regulators of Hong Kong and Vietnam expect to sign a memorandum of understanding (MOU) early next year with the primary goal of enabling Vietnam companies to float shares on Hong Kong’s market. Vu Bang, chairman of the State Securities Commission, told a press briefing last Friday that the Hochiminh Stock Exchange would submit this plan to the Ministry of Finance before signing the MOU, expected for January next year. The agreement between the two securities regulators will create a legal foundation for Vietnamese companies to launch initial public offerings in Hong Kong Stock Exchange, he said. The press briefing was held on the occasion of the visit by Professor K. C. Chan, Secretary for Financial Services and the Treasury of the Government of the Hong Kong Special Administrative Region. Chan said that his visit’s purpose was to promote mutual understanding between Hong Kong’s financial services sector and Vietnam companies. Chan highly appreciated Vietnam’s economical growth as well as the development of the financial market, and added Hong Kong could share experiences with Vietnamese companies and banks in this sector. Ronald Arculli, chairman of Hong Kong Exchanges and Clearing Limited, said that Hong Kong’s securities market in its course of development also had faced a lot of troubles, and the exchange would help the Vietnam market to develop faster by avoiding those mistakes made by Hong Kong in the past. Chan also said that Hong Kong succeeded to be a fund raising center for Mainland enterprises and it would be capable of providing quality services to Vietnamese enterprises seeking to tap the China market. Nguyen Ngoc Canh, director of SSC’s International Cooperation Division, said that the commission would have a meeting soon with enterprises, who want to list overseas, to provide information and support them to carry out listing in foreign countries. As of late October, the market capitalization of Hong Kong had amounted to over US$2,960 billion, the seventh largest in the world and the third largest in Asia. Earlier, many stock exchanges in the world have shown keen interest in attracting Vietnamese enterprises to list abroad such as Singapore Stock Exchange, Korea Stock Exchange, and London Stock Exchange.

Vietnam has room for new real estate entrants

Enough room for new market entrants

GuocoLand Binh Duong CEO Lawrence Peh Singapore’s GuocoLand last week started building a residential complex called The Canary in HCMC’s neighboring province of Binh Duong. The Saigon Times Daily talked with GuocoLand Binh Duong general director Lawrence Peh over the prospects of the domestic property market. Excerpts: The SGT Daily: What is your view about the outlook of Vietnam’s property market? - Lawrence Peh: Over the past year, Vietnam has seen several important diplomatic, economic and cultural events. Vietnam has attracted huge capital inflows and the trend will remain positive in the years to come. As foreign investors are exploring investment opportunities in Vietnam, the realty market should be developed to meet their demand. But the realty market is still risky. What do you think? - We are very optimistic about the market. We have a strong financial position, management expertise and a long-term investment strategy, so our views are based on the development potential of the economy in the future. Many corporations focus on HCMC, Danang and Hanoi realty markets while GuocoLand invests in Binh Duong. Could you explain this? - Binh Duong stands out among its peers given its highest ranking in the Provincial Competitiveness Index and its fastest economic growth. Its per capita income is increasing rapidly as well. Binh Duong is also among the provinces that offer investors the most incentive policies. In the urbanization aspect, Binh Duong is seen as a young city. It has not had any urban projects with international standards but in reality, demand for such projects has already existed. Actually, the market potential of the central region has been foreseen by GuocoLand and we intend to develop projects there in the coming time. We’re also seeking opportunities for investment in HCMC and Hanoi. Who are The Canary’s target customers? - We target young and successful families or high-income people as a whole. The number of high-income earners is swelling. Besides, more foreign investors and white-collar workers are coming to industrial parks and new urban areas and they demand accommodation and services provided by professional property managers. What market segments is GuocoLand interested in? - It depends on the development potential of each locality. The center of major cities will be suitable for high-end condo, office, restaurant and shopping mall projects. In those localities undergoing urbanization, we’ll consider such urban complex projects as The Canary. We forecast the average urbanization rate in Vietnam will be 30% by 2010 and some 50% by 2020. So, the potential is huge, especially that of the housing market. We think housing supply of all segments in Vietnam is short and the imbalance between supply and demand will continue in the next few years. Reported by Thanh Phuong

Reconstruction transforms Vietnam

Doi Moi transforms Vietnam

By CHEAH KING YOONG

DECADES of hard work, commitment and continued reformation upon the launch of Doi Moi (meaning “reconstruction”) programme by the Vietnamese Government since 1986 has transformed Vietnam into one of the most dynamic emerging markets in the world.

Vietnam’s growth domestic product (GDP) growth is expected to reach 8.5% in 2007, making it the second fastest growing economy in Asia after China. Government officials have forecast GDP growth at 8.5% -10% in 2008.

Vietnam is also one of the largest recipients of foreign direct investment (FDI) in the world relative to the size of its GDP in recent years. The US, South Korea, Japan and Hong Kong are its largest FDI providers.

At a time when China and India have been dominating the spotlight on the international front coupled with potential US economic slowdown, some sceptics are questioning whether Vietnam will sustain its economic growth and transform itself into a late coming Asian tiger. I will briefly highlight the key transformation factors.

Favourable demographics: One of the key drivers of Vietnam’s economic growth is the availability of a young and literate labour force. Vietnam ranks 13th in the world in terms of population with 85 million people.

The baby boom after 1975 has created an incredibly young population with a median age of just around 25. My working experience with the local Vietnamese has shown that they are eager to work, hungry for knowledge and open to changes. Furthermore, the younger generation are generally quite entrepreneurial. There are many that I have come across who want to set up their own firms in the next few years.

China plus 1: The availability of young and low cost labour, coupled with government incentives to attract FDI, has made Vietnam an attractive manufacturing centre in the region. With increased political pressure from the US and European Union over cheap Chinese exports, many manufacturers - already well established in China - are engaging in a “China-plus-one” strategy by looking at Vietnam as a way to diversify.

Benefiting from the commodity boom: Unlike some of the emerging economies, Vietnam is benefiting from the upcycle in crude oil price, being the third largest oil producer in Asia. The country is also the largest exporter of pepper and the second largest exporter of rice and coffee in the world. These major resource-based exports have witnessed impressive growth over the recent years as a result of the overall commodity boom.

In 2006, commodity and fishery products continue to be the top export products for the country, with the combined value equivalent to 26.7% of the country’s GDP (see table).

Non-resource-based exports to gain momentum: With increased FDI and a “China plus 1” strategy by manufacturers as mentioned above, non-resource-based exports such as textiles, footwear and furniture are dominating as top foreign exchange earners with the country’s clear shift from agriculture to manufacturing.

The country’s accession into the World Trade Organization (WTO) on January this year is expected to accelerate FDI inflows to the country and provide room for the country’s exports to grow. Furthermore, ever-cozy ties with the US and China will continue to support its booming trade performance.

Equitisation of SOE boosting the equity market: The equity market of the country has experienced a strong rally since 2005 due to the ongoing restructuring and the gradual equitisation of the state-owned enterprises (SOEs). This reform path is very similar to the privatisation of government-linked companies (GLCs) in Malaysia in the early 1990s. The stated goal is to eventually prepare the SOEs to be equitised through initial public offerings.

The equitisation of some of the SOEs since 2005 has attracted strong foreign investors’ interests.

Not all is rosy: History has shown us how the economies of Asian tigers overheated 10 years ago and the ultimately went through some painful corrections. Although Vietnam’s prospects look promising, there are potential risks that could adversely impact its economy going forward. Stay tuned.

Cheah is conducting investment research in Vietnam. He was formerly head of investment research in a domestic broking firm. He welcomes feedback at kingyoongcheah@yahoo.co.uk

Vietnam has infrastructure need of $53 billion USD

Viet Nam must strive for constructive development

HA NOI — The Deputy Minister of Planning and Investment, Nguyen Bich Dat said that Viet Nam must continue to pursue the development of comprehensive infrastructure at an international construction trade fair, Con-Build, on Wednesday.

"Analysis of the National Project List, which was released in September to attract foreign investment, further highlights this country’s need for more infrastructure systems," Dat said.

According to the list, as many as 109 of 163 planned projects, costing US$53 billion were planned for large-scale public systems, services and facilities.

Huge projects with investment capital of $5-6 billion each include the Nghi Son Oil Refinery Complex in Thanh Hoa, Oil Refinery No 3 in Ba Ria-Vung Tau and Long Thanh International Airport in Dong Nai.

A number of port, petrochemistry and railway projects, worth $1-2 billion each are also in the pipelines.

To maintain economic growth over 8 per cent, spending on infrastructure must increase by about 11-12 per cent of GDP, instead of the current 9-10 per cent, the deputy minister said.

"The economy seems to be outgrowing its infrastructure, particularly roading, telecommunications and electricity systems," he said.

To counter the negative effects of such rapid growth the Government has moved to mobilise [investment] sources. However, funds drawn from the State budget and ODA (Official Development Assistance) are insufficient to satisfy identified shortcomings.

Government officials are looking for additional capital of about $2.5 billion a year from the private sector due to budget restrictions and the approaching deadlines of preferential financing. It is hoped that increased private investment, together with co-operation with foreign enterprises will meet the requirements of the nation’s limited infrastructure.

Private investors have funded around 60 BOT (Build Operate Transfer) projects worth $44 trillion; 43 of which are traffic works. To the detriment of infrastructure development such investors have overlooked electricity, water, post and telecommunications projects.

It has been suggested that the slow clearing of sites for construction and ineffective Government planning have further stalled the development of adequate infrastructure systems. — VNS

Hanoi to have world-class horse track

VietNamNet Bridge – After many years of delay as foreign partners two times gave up the game, the project on the biggest horse track in Vietnam will be resumed. In 1999, the project on the horse race field in Hanoi was licenced. The project investor was the Vietnam Sports and Horse Race Club Company. The Hanoi People’s Committee allowed them to build a 439,731 sq m horse track in the areas of Dai Kim and Thanh Liet communes of Hoang Mai and Thanh Liet districts. However, in 2005, the foreign partner in the joint venture gave up, because Vietnam did not allow horse race betting. At that time, Hanoitourism decided to merge with the said company, and then join forces with a British partner to set up a joint venture to continue the project. However, the Hanoi People’s Committee decided that a horse track on the previously chosen land plot in Hoang Mai and Thanh Liet districts would not mesh with the development programme of Hanoi and asked them to relocate the field to Tan Minh commune in Soc Son district. When the Hanoi People’s Committee was going to sign the decision on allocating land for the project, the foreign partner, once again, withdrew from the project. The main reason for the British investor’s withdrawal was that horse race betting was considered legal only if it was carried out within the horse track complex. The Ministry of Planning and Investment then threatened to revoke the licence for the project. However, the Hanoi People’s Committee proposed the retention of the licence after finding a new investor, US-based Global Consultant Network L.L.C. Nguyen Manh Hung, Director General of Hanoutourism, said that his company would sign the contract on setting up a joint venture to develop the project on the biggest horse track in Vietnam next week with the US partner. He said that the US partner had accepted the in-house gambling restriction, which makes the project feasible. “What we need to do now is to fulfill administrative procedures. We will kick-start the project as soon as we can,” said Mr Hung. The parties of the joint venture have estimated that the total investment capital will be $500mil-1bil. The horse track will cover an area of 235 ha, and the project will be undertaken in two phases. In the first phase, $120mil will be injected to build the track, while in the second phase, other items will be built, including 5-star hotels, trade centres, a golf course, water park, apartments and a resort. According to Mr Hung, Vietnam will contribute capital to the joint venture in brand name and prestige, while the foreign partner, cash, equipment, technologies and thoroughbreds. Once operational, this will be a world-class horse track. The project will include a horse training centre to cover an area of 125 ha. In the first phase of the project, right after the field becomes operational, horse race activities will be organised two days a week, while other days it will be open for other entertainment and sports activities. The horse race field will be 6km from Noi Bai Airport and link directly to the centre of Hanoi. The project is expected to create 10,000 jobs.

Oil refinery complex planned for Ba Ria-Vung Tau

A US $3.7 billion project to build Long Son oil refinery complex in southern Ba Ria-Vung Tau province is awaiting investment licence, according to the Viet Nam Oil and Gas Group (Petro Vietnam).

Nguyen Viet Son, Director of Petro Vietnam’s Oil Processing Department said that his group and the Viet Nam Chemical Corporation (Vinachem) will contribute 29 percent of the total investment. The remaining 71% will be provided by two Thai partners, the Siam Cement Group (SCG) and Thailand Plastic Company (TPC).

“We are working hard with the partners on the project,” Son added.

If licensed, the project’s first phase is scheduled to complete in 2011 and the whole project, in 2013.

Once operational, the refinery is expected to employ 5,000 skilled workers.

Long Son complex will be the third large oil refinery projects in Vietnam. The two others are Dung Quat oil refinery in central Quang Ngai province and Nghi Son in central Thanh Hoa province. (VNA)

Vietnam raises retail fuel prices by nearly 15 percent

http://afp.google.com/article/ALeqM5iBtJFJWXFG5YlbFWKta0VuMvbdDg

HANOI (AFP) — Vietnam hiked fuel prices at the pump by almost 15 percent Thursday, raising fears of worsening inflation, to cope with world oil prices that are nearing 100 dollars per barrel.

The price per litre of petrol rose 1,700 dong (0.11 dollars) to a 13,000-13,300 dong (0.80-0.82 dollars) band under a decision by the finance, and trade and industry ministries, the government said on its official website.

Without the price hike, losses of trading enterprises would have spiralled to 12,000 billion dong (740 million dollars) for the year, Deputy Finance Minister Tran Van Ta was quoted as saying by the VNExpress online newspaper.

“The trading enterprises and the government could not stand (the losses) anymore. Therefore, consumers need to share the burden,” he said.

Fuel trading enterprises in Vietnam were allowed in April to set their own retail prices to better compete and respond to market changes, but the communist government reserved the right to intervene when necessary.

Oil retreated below 98 US dollars in Asian trade Thursday after rising to a new peak of 99.29 dollars per barrel on Wednesday.

Experts in Vietnam worry that the increase in retail oil prices will help raise the consumer price index, which the government wants to keep below the targeted 8.5 percent annual economic growth for 2007.

In October, consumer prices rose 9.34 percent year-on-year, the General Statistics Office said. The increasing cost of living has sparked public anger and criticism in the national assembly.

Vietnam has vast oil and gas reserves in the South China Sea and is a major exporter of crude oil, but the country currently lacks major operating refineries and must import all petroleum products.

Chu Lai calls investment for seven mammoth projects

VietNamNet Bridge – The authority of Chu Lai Open Economic one in the central province of Quang Nam just brought out a list of seven huge projects worth a combined US$5.47bil waiting for investors, an official said.

The projects include building Chu Lai international airport, Ky Ha sea port and Chu Lai free trade zone, one to manufacture assemble observatory equipment, wastewater and exhaust fumes treatment facilities, a project for building a high-class seaside town, and the Tam Hai entertainment project among others.

The official said that the authority expected to call for ODA funds for the first three projects, while the others should be developed under the Build-Operate-Transfer form.

"The first three projects relate to infrastructure development and environment protection and need huge investment, so ODA funds will be more suitable," he said.

Last week, Deputy Prime Minister Nguyen Sinh Hung agreed to a proposal by the Ministry of Planning and Investment and Quang Nam Province to make a list of priority projects in Chu Lai to call for ODA funding. The source said the Government's decision was a booster for the economic zone.

"We welcome the decision as it allows us to call for big funds to develop infrastructure projects," he said.

He also added that the authority had met with many investors interested in these projects but it has not yet found the right developers.

"Chu Lai international airport is an example. Some investors have shown keen interest in developing the airport but we cannot find an investor with strong financial capacity to develop this billion-dollar project," he said.

The open economic zone was established in 2003 under a decision by the central Government. The zone covering 27,000 hectares in Nui Thanh District and Tam Ky Town is envisaged to become a financial, banking, commercial, tourism, telecoms and service center in central Vietnam.

In the beginning, many investors have registered to develop projects there but the authority has lately cancelled many inactive projects in an effort to speed up construction in the zone.

As of September, the zone had seen 58 projects licensed, with total pledged capital of US$937.3mil (compared with 139 projects worth around US$1.5bil before the axe fell on idle projects.

The Government has also urged speedier construction of the important economic zone. Prime Minister Nguyen Tan Dung in a document signed in November last year demanded that development be accelerated so that Chu Lai and Dung Quat zones would become the nucleus for growth of the central region.

However, after four years in operation, up to this September only 23 of the licensed projects have started operations.

Work on highest tower in Vung Tau starts

23-NOV-2007

Ba Ria Vung Tau province's general Trading Joint Stock Co and Surprise (Ngac Nhien) Ltd Co yesterday started work on the Silver Sea Tower 20-storey multifunctional building.

The project with a total cost of more than 110 billion dong comprises three floors for trade area, six floors for offices and nine floors of high class apartments.

The building is expected to be put into operation by the end of 2009.

Vietnamese businesses invest more than 1.3 billion USD abroad

17:07' 23/11/2007 (GMT+7)

VietNamNet Bridge - By the end of October, Vietnamese businesses had poured 1.35 billion USD in 241 investment projects in 35 countries and territories, according to the Ministry of Planning and Investment’s Foreign Investment Department. Phnom Penh, Cambodia, where attracts many projects of Vietnam. The projects mainly focus on oil and gas exploration and exploitation, household goods production, construction materials, agro-forestry and fisheries and service. Laos attracted the largest number of Viet Nam ’s investment projects with 84 totalling 580 million USD. It was followed by Cambodia with 27 projects capitalised at 88.5 million USD. Algeria was an exceptional case as Viet Nam ’s only investment project in its oil and gas sector, was valued at 243 million USD. According to the department, encouraging results obtained by Viet Nam ’s overseas investment projects have prompted more businesses to mull similar schemes so as to expand their markets. Besides the traditional markets of Laos and Cambodia, Vietnamese businesses are eyeing potential markets in the Middle East, the Africa, the US and Japan, focusing on the consumer goods industry, textiles and apparels, footwear and trade service. In particular, a number of Vietnamese businesses are targeting the hi-tech market with the Financing and Promoting Technology Corporation (FPT) already launching a project in Japan . Improvements in the legal system and simplified procedures have encouraged Vietnamese businesses to invest overseas, said economists. Experts forecast that Viet Nam ’s investment capital abroad may reach 350 million USD this year.

Storm disrupts Vietnam coffee and oil production

NHA TRANG, Vietnam (Reuters) - A tropical storm dumped rain on several south-central Vietnam provinces, disrupting coffee and oil production and endangering fishermen, officials said on Saturday.

The streets of the coastal resort of Nha Trang were quiet after a night of rain, wind and waves from Tropical Storm Hagibis, downgraded from a typhoon on Friday as it changed direction in the South China Sea after hitting the Philippines.

The government's flood and storm committee said nearly 31,000 people had been moved away from the coast in four provinces.

Vietnam sent a diplomatic note to China about four vessels with 36 fishermen requesting shelter in Chinese territory. Authorities alerted 245,000 fishermen and most sailed out of the danger zone, government reports said.

Officials in the main coffee-growing province of Daklak said light rain had kept farmers from resuming the harvest. The disruption since Thursday at the peak of the harvest threatens to delay deliveries from the world's top robusta producer.

"The rains have been light but enough to keep farmers from their harvest because even when they can pick cherries they are not able to dry them outdoors," Van Thanh Huy, chairman of the Vietnam Coffee and Cocoa Association, told Reuters.

Vietsovpetro, operator of Vietnam's biggest oil field Bach Ho, said the storm was causing a production decline of 10,000 tonnes of crude oil, Saturday's Tien Phong (Vanguard) newspaper reported.

The Vietnam-Russia oil and gas venture has taken 245 Russian and Vietnamese experts and workers from offshore facilities and temporarily shut crude production at Rong (Dragon) oilfield.

Vietnam is Southeast Asia's third-largest crude producer.

Historically, storms rarely strike in late November, the usual start of a six-month dry season.

Vietnam's long coastline is battered every year by up to 10 storms, killing hundreds, even thousands of people. Since August, some central provinces have been hit by a series of storms, raising floodwater to the highest levels in decades.

So far this year, storms and floods have killed 368, injured 515 and left 30 unaccounted for, according to government reports. Total property damage was 7.2 trillion dong ($441 million).

Guide Foreign Investor How To Invest In Vietnam Stock Market

1. For private investors, it is necessary to fly to Ho Chi Minh City. As a foreign investor, you can completely exchange on the Vietnamese stock market under Securities Law and other relating laws.
Foreign ownership of shares in companies listed on the Ho Chi Minh City Stock Exchange is limited to 49% of the company’s issued share capital(except for bank and other special industries). For bonds, foreign investors can hold 100% ownership of a particular issuer’s bonds.

Foreign investors who wish to purchase shares through the Ho Chi Minh City Stock Exchange are required to register through a custodian licensed to hold securities on behalf of foreigners – of which there are currently three: The Hongkong and Shanghai Banking Corporation, Deutsche Bank AG and Standard Chartered Bank. Beside these three, securities companies can play role of custodian unit to hold stocks for foreigners as well. Once registered, a Securities Transaction Code is issued to the foreign investor who may then open a Trading Account with one or more of the twelve licensed Securities Companies.

Basic documents required include:
* For individuals: registration form, applicant information sheet, judicial record.
* For institutions: registration form, applicant information sheet, Certificate of Incorporation, and Decision/Board resolution appointing authorized signatories.

The Investor's information need to be notified by the notary public of the home country and the Vietnamese embassy.

Then the sealed hardcopy must be sent to the securities broker, who applies for a trading code.
Fill out the application for a trading account, which you will receive from your securities broker. And send back a hardcopy.

2. Investors must open a transaction/trading account in VND with a depository member or securities company.

3. The selected depository member or securities company then opens a foreign currency demand deposit for the foreign investor, along with a special VND demand deposit into which the foreign currency that will be used to purchase stock is transferred.

After all account applications are complete, funds are deposited into the VND deposit account according to rules. Buying and trading stock is in VND.

Investors may place orders in person at the office of the selected securities company, by telephone, by fax, or online, depending upon securities company. Trading at the HOSE is conducted daily with two matching sessions at 09:20am and 10:30am local time. Securities companies normally accept orders ten minutes before matching time. If the order is matched, the investor receives the security or deposit in their account after one trading day

World Bank says Vietnam's Stock Market Enters Stable Phase

The World Bank in its updated report on the economic development in the Asia-Pacific region has forecast Vietnam’s economy will grow at sustainable level of over 8 per cent this year and 2008 and its stock market has entered a stable period, state media reported recently.

As of September, the local market had 206 listed companies with the market capitalization of US$22 billion, or 32.4 per cent of the country’s GDP, much lower than India (45 per cent) and China 70 per cent. The listed companies recently released remarkably good earnings reports, which dissolved concerns over the collapse.

However, Vietnamese shares, which were much inflated by exaggerated earnings news, will likely deflate by listing of big names including Vietcombank, the report said. Local market watchdogs must ensure transparency in providing news to protect investors, the press said.

With sustainable economic growth fuelled by industrial production and exports and lower-risk foreign debts accounting for 31 per cent of GDP, a growing indirect foreign investment inflow will pour into Vietnam, particularly in the stock market, it noted.

Vietnam’s leading securities broker, Saigon Securities Incorporation forecast that VN-Index will likely to remain flat in November and to be bullish in December.

“The market will likely be bullish thanks to market-boosted news as listed companies will release full-year earning report and plans for 2008,” a SSI expert said.

In October, VN-Index remained flat, up only 2 per cent over late September, and 17.6 per cent from early August, while HASTC Index strongly rose by 20 per cent and 46.5 per cent, respectively.

Vu Bang, Chairman of State Securities Commission said the local stock market now has 210 listed companies with the market capitalization accounting for 40 per cent of the country’s GDP [50 per cent if government bonds included]

So far listed companies have raised VND60 trillion (US$3.75 billion), tripling last year, and 300,000 accounts opened, tripling 2005, Band said.

At least 50 new stocks will debut on both two bourses by the end of 2007, including shares of big groups in transport, aquiculture, oil and gas, construction materials and chemicals sectors. (Dau Tu Chung Khoan)

French firms say $80m deals done in Vietnam

HANOI: Two French companies said they had signed deals worth a total of about $80 million in the telecom and urban railway sectors at a business forum in Vietnam that ended Friday.

Alcatel-Lucent and International Consulting Engineers for Rail and Urban Transport (Systra) announced the contracts at a meeting in the capital of the fast-emerging economy, where officials pledged to further boost commerce.

“France will develop commerce, investment and financial cooperation with Vietnam,” Herve Novelli, France’s secretary of state for enterprises and foreign trade, said at the end of the two-day Forum ASEAN in Hanoi. “Economic and trade relations need to match bilateral historical and political ties,” he told media at the meeting of 200 businessmen and experts from France and the 10-member Association of Southeast Asian Nations (ASEAN).

“Vietnam’s WTO (World Trade Organisation) membership is important for bilateral ties, and France is on Vietnam’s side to help the country modernise its economy,” he said.

International Consulting Engineers for Rail and Urban Transport (Systra) signed a 33-million-euro (48.8-million-dollar) consultation contract for an urban railway in Hanoi, the state-run Vietnam News Agency (VNA) reported.

The 12.5-kilometre (7.7-mile) route from downtown Hanoi to suburban Nhon will have both elevated and underground sections and 15 stations.

The project has an investment capital of 511.6 million euros, 280 million euros of which is funded by the French government, said the VNA report. The contract signed this week includes construction design and supervision, equipment supply and installation and project management.

Alcatel-Lucent, meanwhile, said it had signed contracts worth around 31 million dollars to provide telecoms equipment to improve landline, mobile telephone and Internet access in the country of 84 million people.

Under one deal, worth 22 million dollars with an investment corporation of Vietnam Post and Telecommunications (VNPT), it said it will provide high-tech switching equipment that will provide more than one million lines. afp

Taiwan company to build LCD plant in Vietnam

Chi Mei to open plant in Vietnam

By Lisa Wang
STAFF REPORTER
Saturday, Nov 24, 2007, Page 11

Chi Mei Optoelectronics Corp (奇美電子), the nation's second-biggest liquid-crystal-display (LCD) panel maker, yesterday confirmed that it plans to build a multibillion dollar television and computer panel assembly line in Vietnam.

The new investment comes amid growing fears of panel shortages next year.

The Tainan-based manufacturer already has two LCD plants in Ningbo and Nanhai in China.

"We plan to build a LCM [liquid-crystal module] plant in northern Vietnam to meet increasing demand," said Loreta Chen (陳靜燕), a Chi Mei public relations official.

No firm agreement has been made yet, she said.

Chen made the remarks after the Chinese-language Economic Daily News reported yesterday that Chi Mei planned to invest several billion NT dollars in an assembly line in Vietnam next year, citing company president Ho Jau-yang (何昭陽).

Chi Mei said it needed the new facility to meet demand for panels from customers including the world's No. 2 laptop computer maker, Compal Electronics Inc (仁寶), and the nation's top electronics manufacturer Hon Hai Precision Industry Co (鴻海精密), according to the report.

Compal said in August that the board approved the proposed NT$989 million (US$30.6 million) investment in Vietnam via a fully owned subsidiary.

Last month, Chi Mei told investors that capital spending would fall by 10 percent to 20 percent next year from as much as NT$75 billion (US$2.3 billion) this year.

By the end of next year, Chi Mei said it planned to more than double production of TV panel modules at its Nanhai plant to 1 million units a month from 200,000 units and to boost production of PC panel modules at its Ninbgo factory to 5 million units from 2.8 million.

Vietnam's open sky private airlines

Private airlines to get off the ground?

13:37' 24/11/2007 (GMT+7)

VietNamNet Bridge - Vietnam’s private airline industry may get off the ground after a licensing proposal from Vietjet Aviation Joint Stock Company won approval from transportation authorities. A recent decision may help the private aviation industry take off A number of local companies have recently announced plans to establish private airlines, but Vietjet is the first to file and win approval from the Ministry of Transport (MoT). The ministry is now proposing that the Prime Minister make the final decision on licensing the airline, which has a chartered capital of $30.8 million. The move fits into the country’s commitment to “opening the skies” of Vietnam as of 2010. Under the amended Civil Aviation Law and Decree 76/2007/ND-CP on aviation transport and general aviation activities, businesses which are qualified in terms of chartered capital, professional experience, organisation, business plan and strategy will be licensed for aviation. Sources from the MoT’s Civil Aviation Administration said the agency has proposed the establishment of two to three private aviation firms from now to 2010. According to Nguyen Dinh Cung, head of the Macro-economic Policy Research Board under the Central Institute for Economic Management, Vietnam’s domestic aviation market is small and riddled with complicated procedures that heavily favour local firms. “The restriction on licensing new aviation firms is a reasonable policy so as to ensure an economy of scale and investment efficiency. What investors really need is transparency on this policy,” Cung said. “To the state, their biggest role is to ensure that licensing conditions are satisfied in order to supervise the licensed business’ operations in line with their business plan and international standards.” Cung’s view partly shed some light on a recent decision by the Prime Minister to turn down a proposal from the Vietnam Shipbuilding Industry Group. In August, the corporation reached an initial agreement with AirAsia to establish a $30 million joint venture to operate a budget airline. Cung said it was totally reasonable that Vinashin was not permitted to join the aviation sector as its key business was shipping. “As a result, if the State wanted to invest more in this sector, investment should be focused on the national flag carrier Vietnam Airlines instead of a new business,” he added. Pacific Airlines is the only joint stock company at present but its shares are held by state-owned companies and Qantas Airways.

Vietnam's domestic gold sales

How will domestic gold fluctuate?

Some financial experts have predicted that the domestic gold price, which slid from VND1.62 million to VND1.53 million per tael from Nov. 7-20, will keep decreasing as investors continue selling off gold for profits.

This is inaccurate considering market trends and investor reactions. In terms of market trends, when the New York market closed on Tuesday, its gold price had increased to US$790.30 per ounce. When the Hong Kong stock exchange opened yesterday, the gold price per ounce had reached about $802.50. When the gold price increases overseas, the domestic price in Vietnam rises accordingly. At 9:30 a.m. yesterday, the price at the Hanoi Bank of Agriculture was VND1.564 million ($97.47) per tael and VND1.56 million ($97.22) per tael at Ngoc Tin Jewelry Company. In fact, the floor price for gold reached VND1.53 million per tael and will not sink lower any time soon. In terms of investor response, the US economy did not cause the domestic gold price to decrease. It was instead investor concerns that pushed up the gold price. The US Federal Reserve has recently slashed its forecast for US economy growth in 2008, citing as reasons a tighter market and a real estate slump. Fed policy makers predicted that the world's largest economy will grow by only 1.8 to 2.5 percent, compared to 2.5 to 2.75 percent in a June prediction. Following the forecast, the US dollar had decreased to its lowest recorded level against the euro. In contrast, the crude oil price rose to $98.62 per barrel, partly because of the weak US dollar and the concern over the world's oil supply. The increase in the gold price could be caused by several reasons, including alterations in each country's foreign exchange reserves, especially in those countries with assets more than $100 billion such as China, Germany, India, Japan, the Republic of Korea, Russia, and Singapore. The gold price therefore could fluctuate and would generally follow the changes in the world's crude oil price and the US market. As long as investors still consider the buying and selling of gold as profitable, the gold price could surpass the current record of VND1.65 million per tael domestically and $850 per ounce in international markets. By Ngoc Minh

Vietnam’s plastic surgery catching up

The world wide trend of surgical facial enhancements and body adjustments has taken a firm hold in Vietnam.

According to the Ho Chi Minh City health department, the burgeoning plastic surgery industry has grown rapidly with 53 licensed plastic surgeries in HCMC. Forty-five are specialized clinics and eight are hospitals offering plastic surgery services. “Vietnamese plastic surgeons at the moment are able to carry out most types of plastic surgery offered elsewhere in the world like nose jobs, scar removal, breast implants, or liposuction,” said Vietnam’s leading plastic surgeon, Tran Thi Anh Tu, from HCMC-based Dr.Tu Cosmetic Surgery and Skin Care Clinic. The latest technology including CT3, VBeam and pixel laser skin tightening is available locally, she said. Recently Tu’s clinic hosted a training session offered by Israeli experts on Ultrashape Contour 1, a new fat-blasting technology which focuses ultra-sound beams. The session attracted attention from several local doctors. Doctor Tu said private plastic surgery clinics in HCMC took particular pains to keep up with new technical advances. Vietnamese plastic surgeons attend international conferences, trained for international certificates and worked with foreign doctors. Phan Van Nghiem, head of the HCMC Department of Health, Medical Affairs Department said the plastic surgery sector in Vietnam enjoys two major advantages. “Vietnamese plastic surgeons are generally capable and devoted to their profession,” he said. “Plastic surgery costs in Vietnam are also 70 percent lower than in developed plastic surgery markets like the US or Israel.” In Vietnam, nose or eyelid surgery costs around US$250 while the price for the same services in the US ranges from $1,000 to $2,500. Hair transplants in Vietnam cost up to $1,500, and inthe US the price averages $6,000. At the moment, Thailand is leading other Southeast Asian countries in plastic surgery. Dr. Tu Comestic Surgery and Skin Care Clinic’s CEO, Tran Thien My, said Vietnam’s plastic surgery industry is full of potential. “If we can make the best of our advantages in this field, including low prices and Vietnamese plastic surgeons’ competence, we can become a popular destination for foreigners seeking plastic surgery services,” he said. Song Du Hee from the South Korea said, “I came to Vietnam for a noselift since I heard that Vietnamese doctors are very careful.” “I had had other plastic surgery in the US. Plastic surgery equipment in Vietnam is even more advanced than in some American businesses.” But a former health official warned the plastic surgery sector in Vietnam faces some problems. Former head of HCMC Health, Nguyen The Dung, said despite regular inspections from local health officials, many plastic surgery businesses were of questionable quality and operating without licenses. In the first two months of 2006, for instance, 2 female patients died after under going plastic surgery at unauthorized clinics in the city. Dung said a major setback was the lack of punishment for violators. The heaviest penalty at present is only a warning. Reported by Linh Chi

Vietnam defends $2 billion Spratly gas project

HANOI: Vietnam said Thursday that a BP-led $2 billion natural gas field and pipeline project in the South China Sea was within the bounds of its sovereignty, after Beijing accused Hanoi of infringing on China’s territory.

China, Vietnam and Taiwan claim all of the Spratly Islands, a string of rocky outcrops in the South China Sea, possibly containing large oil and gas deposits, while Malaysia and the Philippines claim parts of them.

A spokesman for the Vietnamese government said that the division of its islands and territorial waters “into blocks for oil and gas exploration and exploitation is completely normal” and conforms with international laws.

“The cooperation project between Petrovietnam and BP of Britain has been implemented since 2000 and is within the bounds of Vietnam’s exclusive zones and continental shelf, completely under the sovereignty of Vietnam,” a spokesman for the Ministry of Foreign Affairs, Le Dung, said in a statement.

The planned $2 billion gas field and pipeline project, about 370 kilometers, or 230 miles, southeast off Vung Tau on the southern coast, is adjacent to the BP-led Lan Tay-Lan Do gas fields that have been producing gas for power generation since 2002.

According to maps of the region, the Lan Tay-Lan Do gas fields are not within an ongoing joint seismic exploration effort in the Spratlys between the national oil companies of China, the Philippines and Vietnam.

The U.S. oil firm ConocoPhillips and Petrovietnam are also partners in the new venture, which is pending final agreement. Neither China nor the other countries that contest the Spratlys had made any public statements about the BP project before Tuesday, when China’s Foreign Ministry spokesman, Qin Gang, was asked to comment on the pipeline venture, and about Vietnam’s plan to hold local elections on the islands.

“Vietnam’s series of new actions infringing on China’s sovereignty, sovereign power and administrative rights in the Spratly Islands, goes against the important consensus reached by leaders of the two countries on the maritime issue,” he told a news conference in Beijing, in response to a question from a local reporter.

A BP spokesman in London declined to comment. Vietnam has traditionally been wary of its larger Asian neighbor. In 1979, the two countries fought a short border war after Vietnam occupied it neighbor, Cambodia, and overthrew the murderous Khmer Rouge regime, which was backed by Beijing.

In 1988, China and Vietnam fought a brief naval battle near one of the Spratly Island reefs, in which more than 70 Vietnamese sailors died.

Beijing and Hanoi normalized relations in 1991 and tensions have eased considerably in recent years.

Thailand's Siam Cement Group to pump billions into Vietnam oil refinery

Thailand’s SCG plans to pump billions into oil refinery at Long Son complex

(17-11-2007)

HA NOI — The Thai Siam Cement Group (SCG) tabled its plans to pump around US$3.7 billion into an oil refinery at Long Son Petro-chemical Complex at a recent meeting between Prime Minister Nguyen Tan Dung and the firm’s president Kan Trakulhoon.

SCG media executive Dinh Do Phu yesterday said the project had received support from the Prime Minister.

"SCG has already reached agreement with the local leading company PetroVietnam (Viet Nam Oil and Gas Group) to jointly carry out feasibility research for the project," Phu said. After completing the feasibility studies, the joint venture plans to submit more comprehensive project plans to the Government for approval, said Phu.

"Some $3.7 billion is set aside in the fund that SCG has earmarked for the project, while the counter capital from PetroVietnam is not known as we are planning further talks with each other," he said.

PetroVietnam’s chairman Dinh La Thang refused to elaborate on the issue during an interview yesterday.

However, he has said before that in case it was not easy to reach agreement with overseas partners to realise the Long Son Complex, PetroVietnam would raise money from its ownership capital and local resources, especially via the effective stock market channel.

Long Son Complex, which is located in southern Ba Ria - Vung Tau Province, is one of three large oil refinery projects in Viet Nam that need huge investment capital. The two others are Dung Quat oil refinery in central Quang Ngai Province and Nghi Son in central Thanh Hoa Province.

Thai-based SCG, one of Thailand’s three biggest industrial groups, was founded in 1913 and the holding group started to tap into Viet Nam in 1992. Since then they have set up two representative offices in HCM City and Ha Noi and operate mainly in the petro-chemical, paper and construction materials industries. — VNS

Vietnam's aircraft leasing takes off

Aircraft leasing company takes off

(17-11-2007)

Representatives from Vietnam Airlines, VALC and Boeing ink purchase aggrements yesterday night for the sale of B787-8 Dreamliner passenger aircrafts. — VNS Photo Truong Vi

HA NOI — The Vietnam Aircraft Leasing JSC (VALC) officially started work yesterday with purchase agreement worth US$1.42 billion with Boeing to buy up to eight B787-8 Dreamliners passenger aircraft.

This is the most advanced aircraft in Boeing’s flock. Under the contract, VALC will receive the first aircraft by 2016.

The Ha Noi based aircraft leasing company is the first one of its kind in Viet Nam, which is seen as a major move in liberalising the airline industry.

Vietnam Airlines has already signed a contract to hire all of VALC’s eight aircraft once they are available. VALC’s first major client will be Vietnam Airlines but VALC said it also plans to target other companies in the region.

VALC has VND640 billion ($40 million) in charter capital. Under the proposed development plan, the company will raise its charter capital to at least $200 million in its first phase from 2007-2014, and to $1 billion by 2025.

The company’s founding shareholders include major State enterprises: Vietnam Airlines holds 23 per cent, the Bank for Investment and Development of Viet Nam (BIDV) 20 per cent, the Viet Nam Oil and Gas Group (PetroVietnam) 17 per cent and the Viet Nam Shipbuilding Industry Group (Vinashin) 11 per cent. Phong Phu Corp, a leading textile producer, contributes 8 per cent.

The remaining stock in the company will go to other shareholders.

VALC will deal in various aircraft, from helicopters to cargo planes, which will be leased on both long and short term basis. The company will also provide other aviation services.

Commenting on whether Vietnam Airlines would be offered preferential prices, BIDV Deputy General Director Le Dao Nguyen who is also vice chairman of VALC said: "Regardless of the fact that Vietnam Airlines is the biggest shareholder and at the same time VALC’s biggest client, the prices offered to Vietnam Airlines must be based on the common prices on the global market."

VALC also plans to increase charter capital with the participation of foreign investors, however, in the short term, this plan will be put on hold.

"We also expect that once the company makes a profit, VALC will join the stock market and raise other long term investments. Personally, I think [the plan] is not too ambitious," said Nguyen.

The leasing company will help meet growing domestic demand for aircraft, especially among private civil aviation companies such as SaiGon Air Corp.

"We will surely help in-house aviation companies as there seems to be real potential for this in the market," Pham Ngoc Minh, chairman of VALC said. "Vietnam Airlines currently has 46 aircraft, which is a really small number compared to the demand."

Following the signing of a Memorandum of Understanding with the Boeing Group during PM Nguyen Tan Dung’s visit to the US in September, Vietnam Airlines signed a contract yesterday to purchase another four Boeing B787-8 Dreamliners. Financial term of the contract were not disclosed.

Vietnam Airlines will receive the first B787-8 Dreamliners by 2009, said chairman of Boeing, Scott Edward Carson said.

The contracts with Boeing presented for a very bright future for Vietnam Airlines and marked a milestone for the strong development of Viet Nam’s aviation industry, he added. Vietnam Airlines would soon become a leading airline across the world.

Under a 2006 projection, Vietnam Airlines will need 86 aircraft by 2015 which will rise to 110 by 2020. However, Minh said this figure could be adjusted up 30 per cent due to its good performance. — VNS

Vietnam's new shipping navigation system

Vietnam goes electronic with navigation

Local shipping has begun to install a new electronic charting system to navigate between Ho Chi Minh City and Vung Tau.

Engineers of the Marine Safety Company II in Vung Tau City researched and created the system called the Electronic Navigational Chart (ENC). Vung Tau Company Director Pham Dinh Van said currently 70 percent of international ships used electronic charts but domestic shipping was still getting familiar with the system. ENC has advanced domestic port operations to meet the International Marine Organization requirements, attracting more foreign ships to local ports. The electronic system was tested en route between HCMC and Vung Tau in early 2007 and then recognized by international marine companies.

Vietnam housing developer reports performance, plans share issue

Ba Ria Vung Tau Housing Development Joint Stock Co (Hodeco)'s shareholders' meeting recently passed the plan in revenue and profit for the fourth quarter of 2007 and phase 2008 to 2010 whereby the company targeted to earn 53 billion dong in revenue and 6.095 billion dong from after tax profit in the fourth quarter of 2007 and 20.13 billion dong from after tax profit for the whole year.

In 2008, Hodeco plans to bring 406 billion dong in revenue and 52.78 billion dong from after tax profit. The figures will be 515 billion dong and 72.1 billion dong by 2009 and 700 billion dong and 98 billion dong by 2010 respectively.

The shareholders' meeting also approved the plan to raise the company's chartered capital via offering 2.672 million shares at the price of 35,000 dong per share to the public. The ratio for existing shareholders will be three new shares for 10 shares held. The capital being raised from share issuance will be invest in building apartment at 199 Nam Ky Khoi Nghia, Vung Tau City and the 49-hectare project in ward 12, Vung Tau City in the southern province of Ba Ria Vung Tau.

The surplus shares of 233,600 shares after offering to the existing shareholders and the un-sold shares will be allocated to the company's employees at the price of 50,000 dong per share. (DTCK)

Vietnam Visa Help Sites and Facts

Vietnam Visa - Things you should know

Most visitors still need to apply for a Vietnamese visa in advance to travel in Vietnam. Vietnamese visa is quite cheap in comparision to other countries' visa fees ranging from US$45 - 85 if application is sent directly to the Embassy or US$25-55 if your visa has been pre-approved. Today, it is easy to obtain a Vietnam visa upon arrival, but it is recommended to get your visa in advance. Read our who need visa for the visa exemption information.

Prime Minister Nguyen Tan Dung has given the nod to a new regulation allowing overseas Vietnamese and their families to enter Vietnam without visas as of September 1. Read more on lotus blog.

Visa tips: Visa regulations are often changing, so check carefully before you are due to travel. Usually, it is possible to extend visas within Vietnam but not during the Party Congresses.

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Spotlight

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Vietnam Embassies And Consulates Abroad

Country Address Website Australia 6 Timbarra Cresent, O'Malley, Canberra www.au.vnembassy.org Canada 226 Maclaren Street, Ottawa, Ontario, KP2OL6 France 62-66 rue Boileau, 75016 Paris vnparis@imaginet.tr United Kingdom 12-14 Victoria Road, London W8 5 RD www.vietnamembassy.org.uk United States 1233 20th Street, NW Suite 400. Washington, DC 20036 www.vietnamembassy-usa.org

Useful visa resources

Consular Information Sheet - Vietnam consular sheet - Vietnamese visa Visa exemption agreements - List of visa exemption agreements between Vietnam and foreign countries (31 December, 2006) by Ministry of Foreign Affairs.

Vietnam opens property market further

With a new law to allow foreigners 70-plus years of leases, Vietnam has become one of the most openmarkets in Asia

POST REPORTERS, AFP

As Thai real-estate companies such as Preuksa Real Estate Plc are looking to bid for land plots in Vietnam for development, the surging demand in the country has taken a new turn after the government issued new laws that allow the lease of land for 70 years and then extensions without any payments.

The move by the Hanoi government to issue Decree 84 earlier this year brought the communist country one step closer to opening up its real-estate market to foreign ownership and in effect putting treatment on par for both local and international developers.

Decree 84, issued in May, stated that foreign investors can now lease land for 70 years, extendable without additional payment. This effectively creates a perpetual lease and means that overseas developers are effectively treated the same as Vietnamese developers, say executives of CB Richard Ellis, the world's largest commercial real estate services firm.

A guard sits in front of a newly built residential building in Hanoi. Vietnam today is enjoying a property boom, with grade-A office rents now at US$40-45 per sq m in Ho Chi Minh City, about three times more than Bangkok's office rentals. — AFP

nvestors are queuing overnight to purchase condominium units, with prices of good-quality projects now hitting $3,500 per square metre, around the same price as an average grade-A condominium in Bangkok.

Previously the longest lease available to a foreign purchaser or investor was 50 years. The creation of what in effect a perpetually renewable lease means that Vietnam now has one of the most open property markets in Asia. China only offers a maximum 70-year lease to foreign investors.

"The effect of this has been a massive increase in interest from foreign developers," Marc Townsend, managing director of CB Richard Ellis in Vietnam, said in a statement. "We are meeting developers from Hong Kong, Singapore, Korea, Japan and Thailand on a daily basis."

Thailand, by contrast, offers foreigners 30-year leases with the possibility of one or maybe two 30-year extensions at the owner's discretion.

Among the Thai companies that have announced their intentions to invest in the booming Vietnamese real-estate market has been Preuksa, which said it would invest close to two billion baht in various projects in Vietnam, India and other parts of the region.

Preuksa, the country's second-largest residential developer, said it planned to bid for land in Ho Chi Minh City in mid-December to develop medium-priced housing units in which it specialises.

The move by the government to open up the markets has made the entry of companies such as Preuksa easier.

Apart from the opening up of the residential property sector, Vietnam has also made significant moves in other sectors. On Jan 1, 2009, Vietnam will open up its retail markets to international retailers in compliance with its commitment to the World Trade Organisation, a move that is likely to help companies such as Central Pattana Plc, which has already announced its intentions to set up a venture there, much easier.

"We are seeing international retail brands looking at setting up their first outlets in Asia in Vietnam because they are allowed to own and control their operation," added Mr Townsend.

The boom in the property sector comes amid the growth of the Vietnamese economy, which is among the fastest-growing in the region, and this has prompted a sharp increase in prices of both rental and sales.

Vietnam today is enjoying a property boom, with grade-A office rents now at US$40-45 per square metre (excluding service charge) in Ho Chi Minh City, approximately three times more than Bangkok's office rentals.

In terms of purchasing of properties, investors are queuing overnight to purchase condominium units, with prices of good-quality projects now hitting $3,500 per square metre, around the same price as an average grade-A condominium project in Bangkok.

Townsend: Foreign brands to enter

This is an indication of a real-estate boom happening, where prices are soaring on properties yet to be built and investors are camping in the streets to get first chance to buy.

Vietnam is witnessing a sprouting up of western-style suburbs and apartment blocks, driven by more than 8% annual economic growth and a stock market that has given investors ready cash to spend.

Realtors say the pace is so hot that supply cannot match demand, which is sending prices zooming off the charts - no mean feat in a country where per-capita GDP is under $1,000.

"Prices have doubled in 12 months, nearly tripled in some cases over the past 18 months," said Brett Ashton, managing director of Savills Vietnam, a property services firm.

It will take two years in the country's commercial centre of Ho Chi Minh City and surrounding areas to match demand and cool down prices, Mr Ashton said.

In another sign of the boom, hundreds of people in the city queued all night several weeks ago to try to buy flats on a site where the developer had not even broken ground yet.

"A lot of local Vietnamese people have made a lot of money in the stock market in the last two years or so," said David Blackhall, a deputy managing director at VinaCapital Real Estate.

"Now they see real estate as another opportunity to invest and make very quick returns."

In just one year, some Ho Chi Minh City neighbourhoods have seen apartment prices jump as much as 100%, he said, adding that more than 80% of those investing in property are paying in cash.

"Today, to spend $1,500 or $2,000 a square metre is not unusual," Mr Blackhall said. He said he could see the price rising to $4,500.

Though 70% of the country's 84 million people still live in rural areas, more and more of them are heading to cities, armed with increased buying power.

Mr Townsend says that despite all this CBRE is very positive about the prospects for the Vietnamese property market and with the change of law and the higher participation by international developers will result in the construction of world-class developments and will bring in modern construction management and building technology.

The fact that there is liberalisation being undertaken in the retail segment also means that Vietnam will be able to leapfrog over other countries by offering a wide range of international brands. Brand owners will be willing to invest in their brands in Vietnam because they can own and control their operations, he said.

The boom is also affecting the commercial property market. The amount of "international quality" office space in Ho Chi Minh City, the former Saigon, should increase from 320,000 to 800,000 sq m in three to five years, said Mr Townsend.

The inflow of direct foreign investment and growing interest in the real-estate market by overseas Vietnamese are also helping to push prices up.

"The present rise in real estate prices essentially results from across-the-board speculation and many weaknesses in fiscal policy," said Hoang Xuan Bac, architect and deputy director of a Hanoi real estate project.

To cool the fever, a former environmental vice-minister, Dang Hung Vo, has proposed legislation to limit speculation. But his proposal has not been taken up for years.

Vietnam launches largest container ship built in Vietnam

Ha Long shipyard launches biggest container ship

The Vinashin Dragon leaves the slipway into the water at the launching ceremony in Quang Ninh Province yesterday By MINH NGUYEN (SGT-HCMC) Ha Long Shipyard yesterday successfully launched a container ship in northern Quang Ninh Province with its capacity of 1,750 twenty-foot-equivalent units (TEU), which is the biggest container ship ever built in Vietnam. Shipyard director Nguyen Duc Than said the container ship, named Vinashin Dragon, would be delivered to a local client by the end of the first quarter next year. It is the first ship of a contract for five container ships ordered by Vinashin Lines, and both the shipbuilder and the client are members of the giant Vietnam Shipbuilding Industry Group (Vinashin). The 184-meter-long and 25-meter-wide ship, with a tonnage equivalent to 23,000DWT, is worth US$36 million. Construction of the ship was supervised by Germany’s register company GL, and it is equipped with European machines. Besides this order to build a series of large container ships, the shipyard will also be launching cargo ships of 53,000DWT, Than said, adding the shipyard was making in-depth investment to enhance its capacity for building ships of up to 70,000DWT. Ha Long Shipyard is one of two shipyards selected for implementing a contract between Vinashin and Britain’s Graig Investments in building a series of 15 vessels of 53,000DWT. Under the contract signed in January of 2004, these 15 vessels would be built within five years. In related news, Pha Rung Shipyard in the port city of Haiphong will deliver a cargo ship of 20,000DWT to Vinashin Maritime Company (Vinashinship) in December this year. The Vinashin Bay ship is scheduled for test run by the end of this month. Meanwhile, Ben Kien Shipyard in Haiphong has delivered an 8,700DWT ship to a Japanese customer named Kanematsu last month. The Unicorn Bravo ship was designed by Japan’s AZ and supervised by Japanese register company NK. Another shipyard in Haiphong - Bach Dang Shipbuilding Industry Corporation, plans to deliver the VTC Dragon ship to Vitranschart, a subsidiary of the Vietnam National Shipping Lines (Vinalines). The 22,500DWT ship, designed by Vinakita as a joint venture between Vinashin and Japan’s Kitada, is part of a contract for building eight ships for Vinalines.

Manulife takes on investor education in Vietnam

by Rita Raagas De Ramos | 16 November 2007

The company recently launched the third retail mutual fund in the market, which is targeting a December listing date.
Manulife Vietnam Fund Management Company is among the latest to test the waters in Vietnam’s nascent fund industry.

In July, the company launched the Manulife Progressive Fund. That was only the third closed-end, retail mutual fund to be offered in Vietnam and is expected to be listed in December. The fund didn’t quite meet the fund size the company was aiming for, raising only VND215 billion ($13.6 million) or just 85% of the target.

But for David Wong, general manager at Manulife Vietnam, that was a good enough start. Manulife started in Vietnam as a pure life operation eight years ago, and the fund company unit was formed in 2005. Initially, the fund company was formed to manage Manulife’s life assets, which amounts to around $220 million now.

“In 2006, we saw the changes in the stock market and the changes in the society, especially among the middle class. People were investing more, especially in the stock market and in real estate,” says Ho Chi Minh City-based Wong. “We felt that it was a good time to start our own retail mutual fund.”

Since mutual funds are such a new concept in Vietnam, Wong says he isn’t disappointed that the Manulife Vietnam’s first offering wasn’t fully subscribed.

“Retail investors in Vietnam still need a lot of education. We need to explain to them the difference between investing in stocks and mutual funds and explain to them the benefits of investing in a mutual fund,” he says.

As one of the first movers in Vietnam’s fund management industry, Manulife Vietnam is among the companies that have taken on the “huge responsibility” of investor education, Wong notes.

“Vietnam is a young market. Retail investors are unaware of the other products
that could be available to them,” says Mark Canizares, Ho Chi Minh City-based investment director at Manulife Vietnam and manager of its first mutual fund.

“We have gone around the country to talk about the fund and mutual funds in general and you can see from the type of questions they ask that many of them are generally not yet ready to embrace investing in funds. Some were asking who would get the fund when they die, clearly mistaking the fund to be some kind of an insurance product,” he adds.

Wong says Manulife Vietnam’s fund is the company’s means of gaining experience in the local market.

“We had to start somewhere,” he says. “We need to get the experience, learn the process, and study the investment behaviour of retail investors.”

Manulife Vietnam has no immediate plans to launch another retail fund, and in the event that it does, it will likely be a sector-specific fund such as an infrastructure portfolio, Wong says.

The company is in talks with other fund management companies outside Vietnam for potential third-party fund management, and this is something Wong is keen on pursuing. He declined to elaborate as talks are ongoing.

“We have a local team here in Vietnam with local investment expertise. We know the rules and regulations. We have the backing of a global and regional discipline,” Wong says. “We think we are in the position to manage third party funds and offshore funds.”

Manulife Vietnam has six investment professionals, including Canizares. Wong says there are plans to expand the team, but he declined to give more details such as the number of new hires he expects or a timeframe for expansion.

Vietnam is key partner in Korean trade

Vietnam – RoK’s premier economic partner in Southeast Asia

Vietnam is the most important economic partner of the Republic of Korea (RoK) in Southeast Asia, the KBS channel television reported on the occasion of Vietnamese Party General Secretary Nong Duc Manh’s RoK visit from Nov. 14-16.

Surely, General Secretary Manh’s visit will give a big boost to Vietnam-RoK partnership, which has been strengthened politically, economically and culturally over the past 15 years, the KBS said.

Vietnam is a fast-growing nation, driven by its reform and open market policy, and is undoubtedly the most dynamic nation in Southeast Asia, enjoying a rapid rise in the international arena.

Meanwhile, the Korea Times said that during talks between General Secretary Manh and President Roh Moo-hyun, the two leaders agreed to expand economic and cultural cooperation.

Two-way trade between Vietnam and the RoK has increased about 10 times in 15 years and the RoK has become the largest investor in Vietnam. More than 1,000 Korean enterprises are running business and investment operations in Vietnam, creating over 200,000 jobs. In 2006, close to 430,000 Korean tourists visited the Southeast Asian country.

Czech regards Vietnam top economic partner

The Czech government considered Vietnam one of the countries to get its top priority in stepping up bilateral economic, trade and investment cooperation, said Zdenek Kocarek, Director of the Czech Chamber of Commerce’s Foreign Department.

Director Kocarek predicted that there will be a wave of investment from the Czech Republic, especially after seven economic agreements valued at 3.5 billion USD, signed during the Czech Republic visit by Vietnamese Prime Minister Nguyen Tan Dung last September, come into operation.

The Czech Republic has invested 50 million USD in 13 projects, ranking 40 among 81 investors in Vietnam.

The country is expected to boost its exports to Vietnam in a hope of reducing trade deficit. Two-way trade between Vietnam and the Czech Republic stands at 150 million USD with two thirds from Vietnam’s exports of farm produce, seafood, garments, handicraft articles and computer components.

Vietnam is currently importing from the Czech Republic machinery, glassware, plastics, milk and milk products.

Director Kocarek has been in Vietnam from November 14 to 16 together with 20 businessmen who accompanied Czech Minister of Industry and Trade Martin Riman for a visit.

Vietnam purchases eight B787-8 Dreamliners

Aircraft leasing company debuts with contract with Boeing

The Vietnam Aircraft Leasing Joint-stock Company (VALC) signed a 1.42 billion USD contract with Boeing to purchase eight B787-8 Dreamliners planes after its debut ceremony in Ha Noi on November 16.

The new company comprises domestic industrial giants as founding shareholders, including Vietnam Airlines, the Bank for Investment and Development of Vietnam (BIDV), the Vietnam National Oil and Gas Group (PetroVietnam), the Vietnam Shipbuilding Industry Group (Vinashin) and the Phong Phu Corporation.

VALC CEO Tran Long said his company will receive the first of the eight planes in 2016. The company plans to lease out all the eight aircraft to Vietnam Airlines.

Vietnam catches real estate fever

HANOI, Nov. 11, 2007 (Thomson Financial delivered by Newstex) -- There's a real estate boom happening in communist Vietnam, where prices are soaring on properties yet to be built and investors are camping in the streets to get first chance to buy.

Western-style suburbs and apartment blocks are sprouting up, driven by more than 8 percent annual economic growth and a stock market that has given investors ready cash to spend.

Realtors say the pace is so hot that supply cannot match demand, which is sending prices zooming off the charts -- no mean feat in a country where per capita GDP is under 1,000 US dollars.

'Prices have doubled in 12 months, nearly tripled in some cases over the past 18 months,' said Brett Ashton, managing director of Savills Vietnam, a property services firm.

It will take two years in the country's commercial centre of Ho Chi Minh City and surrounding areas to match demand and cool down prices, Ashton said.

In another sign of the boom, hundreds of people in the city queued all night several weeks ago to try to buy flats on a site where the developer had not even broken ground yet.

'A lot of local Vietnamese people have made a lot of money in the stock market in the last two years or so,' said David Blackhall, a deputy managing director at VinaCapital Real Estate.

'Now they see real estate as another opportunity to invest and make very quick returns,' he said.

In just one year, some Ho Chi Minh City neighborhoods have seen apartment prices jump as much as 100 percent, he said -- adding that more than 80 percent of those investing in property are paying in cash.

'Today to spend 1,500 or 2,000 dollars a square meter is not unusual,' Blackhall said. He said he could see the price rising to 4,500 dollars.

Though 70 percent of the country's 84 million people still live in rural areas, more and more of them are heading to cities, armed with increased buying power.

The boom is also affecting the commercial property market, said Marc Townsend, managing director of realtor CB Richard Ellis (NYSE:CBG) Vietnam.

The amount of 'international quality' office space in Ho Chi Minh City, the former Saigon, should increase from 320,000 to 800,000 square meters in three to five years, he said.

The inflow of direct foreign investment and growing interest in the real estate market by overseas Vietnamese are also helping to push prices up.

'The present rise in real estate prices essentially results from across-the-board speculation and many weaknesses in fiscal policy,' said Hoang Xuan Bac, architect and deputy director of a Hanoi real estate project.

To cool the fever, a former environmental vice-minister, Dang Hung Vo, has proposed legislation to limit speculation. But his proposal has not been taken up for years.

Vietnam's oil refineries financing

Foreign firms may be cut out of second oil refinery

PetroVietnam has faced obstacles like higher capital costs in talks with foreign investors for Vietnam's second oil refinery and proposed that only domestic firms invest in the project.

The media said Friday that in February the state-run oil and gas firm had discussed with Japanese refiner Idemitsu Kosan Co Ltd forming a joint venture to build the 170,000 barrels per day (bpd) Nghi Son refinery, which the Japanese company estimated would cost US$5.25 billion.

PetroVietnam chairman Dinh La Thang told Vietnam Economic Times that his company had suggested two alternatives to the government, including a secondary option to continue negotiating with foreign firms to invest in the plant in the central Thanh Hoa Province.

"We are more inclined towards the first option," he said, referring to limiting the project to local investors.

PetroVietnam had lined up five domestic companies to be partners in the project and secured foreign crude oil supply to the plant for 30 years, he said. But he did not name any of the five firms.

No information was available on which foreign crude they secured, but in September PetroVietnam signed an initial pact with Western trader Trafigura for 30 years.

Idemitsu is among several foreign companies, including South Korea's Hanwha Chemical Corp, which have expressed interest in investing in the Nghi Son refinery, slated to become operational in 2013.

PetroVietnam became the sole investor and operator of the country's first refinery Dung Quat, scheduled to come online in 2009, after foreign investors withdrew from the project saying its location in the central region was too far from consumption centers.

is financed by proceeds from government sovereign dollar bonds and loans, including $300 million from a group of foreign banks including BNP Paribas, ANZ Bank, Bank of Tokyo-Mitsubishi UFJ and Mizuho.

Vietnam Development Bank lent $1 billion to the project last February.

PetroVietnam is also looking for investors for a third refinery with a capacity of about 180,000 bpd, to be located in Long Son in the oil-rich province of Ba Ria Vung Tau, as it moves to reduce reliance on oil product imports.

PetroVietnam officials have said a handful of oil majors have expressed interest in the Long Son project due to its location near Vietnam's biggest oil consumption markets Ho Chi Minh City and the Mekong Delta provinces.

But no firm deals had been reached so far, they added.

US Pizza to enter Vietnam; plans Europe exports

Ahmedabad: US Pizza Pvt Ltd, the Bangalore-based fast-food outlet chain, is set to expand to Vietnam and export to Europe, Akbar Khwaja, Managing Director, said here.

After inauguration of India’s largest pizza outlet occupying an area of 5,000 sq. ft., he told reporters that US Pizza has signed a master franchisee agreement for opening pizza outlets in Vietnam.

Besides, it has also tied up with a Norwegian company, which serves pizzas off-the-shelf and has outsourced part of production to India. Under this arrangement, the base for pizzas would be manufactured at Bangalore and exported to Norway, Sweden and other European countries where the final product would be assembled.

Khwaja said the company, which now has 58 outlets across 31 cities mainly in southern and western India, would have 150 outlets by the end of 2008. These would include many tier-two and-three cities and towns.

Vietnam's banking competition spurred on by WTO accession

Banking operation has made positive progress since Vietnam joined the World Trade Organisation (WTO) one year ago, according to Vu Viet Ngoan, Vice Chairman of the National Assembly’s Economic Committee.

The sector’s upward trend will continue in the next few years, he added.

The entry of foreign banks in the domestic market in line with the country’s WTO commitments has positive impact on Vietnam ’s financial institutions, Ngoan, who used to be General Director of the Vietnam Foreign Trade Bank, affirmed while responding to a Vietnam News Agency reporter on the sidelines of the second session of the 12 th NA.

With a population of 85 million and 6 million of them are account holders, Vietnam is a potential market for card service, prompting its annual development rate of 50-70 percent, Ngoan said.

Though imposing a hard competitive pressure on local peers, foreign banks have prompted them to change their way of thinking and increase their self-motivation.

To increase competitive edge, local banks are in a fierce race to raise their market shares by joining hands with other domestic or foreign partners.

Such banks as the Bank for Investment and Development of Vietnam and the
Bank for Foreign Trade of Vietnam are expected to become dynamic financial groups.

During the last year, most commercial joint stock banks have had doubled their chartered capital along with operation scale and network expanded.

Modern technology has enabled these banks to take part in an inter-banking e-payment system.

Vietnam becomes new fishing power in Asia

Vietnam – new fishing power in Asia, says researcher

Vietnam is now among the major fish-producing and trading countries, said the chairwoman of the Commission of the Australian Centre for International Agriculture, in a paper presented to the Lowy Institute in Sydney on November 7.

In 2004, Vietnam was the world’s 10 th largest producer of fish and aquatic products, Dr. Meryl Williams said, adding that the country’s aquaculture growth is particularly strong, making it the largest aquaculture producer in Southeast Asia and third in the world in 2004, behind only China and India.

According to Dr. Williams, who was the former director-general of the World Fish Centre until 2004, advances have been greatest in aquaculture in Vietnam despite its late start and it now comprises more than a third of total fish production.

In 2001, Vietnam was the world’s 10 th largest fish exporter, selling 1.8 billion USD and the figure reached close to 2.6 billion USD in 2006, she said.

However, Vietnam’s aggregate fish production also masks underlying signs of overexploitation, while adding to the overall competition for Southeast Asia’s increasingly pressured fish resources, she noted.

Sacombank has pocketed the Vietnam Retail Bank of the year 2007 award.

Sacombank: Vietnam’s 2007 retail bank

The Saigon Thuong Tin Commercial Bank (Sacombank) has pocketed the Vietnam Retail Bank of the year 2007 award.

The award was presented to Sacombank in Singapore by the Asian Banking and Finance – a top Asian financial magazine of the UK-based Charton Media.

Sacombank was selected for the award due to its trademark, financial efficiency, sustainable source of revenue, transparent development strategy, selling capacity, risk management competence, creativity and development potential.

Sacombank currently leads other joint stock banks in Vietnam in terms of charter capital (more than 4.4 trillion VND).

The bank attained a pre-tax profit of more than 1.2 trillion VND in the first ten months of this year, a year-on-year increase of 169 percent.

PetroVietnam opens rep. office in Vientiane Laos

The Vietnam National Petroleum Group (PetroVietnam) inaugurated its Representative Office in Vientiane on November 8.

At the inaugural ceremony, Vice Chairman of the Lao Planning and Investment Committee, Thongmy Phommisay, presented the license to the Representative Office of PetroVietnam.

Bosaikham Vongdala, Lao Minister of Energy and Mining, Vu Huy Hoang, Vietnamese Minister of Industry and Commerce and Vietnamese Ambassador to Laos Nguyen Huy Quang attended the function.

With a Rep. Office in Vientiane , PetroVietnam affirmed its intention to cooperate with Laos , develop projects on oil and gas exploration, exploitation and energy development in Laos in furtherance of agreements between the two Parties.

Australia and New Zealand Banking to build Vietnam powerhouse

Newly-appointed Chief Executive Officer of Australia and New Zealand Banking Group Ltd. (ANZ) said the bank will step up its activities in Vietnam as part of its strategy to become a power house in Asia.

“We will focus on a number of key countries and Vietnam is one of these key countries,” Michael Smith said at a press conference held in Ha Noi on November 11 during his two-day visit to Vietnam.

According to Smith, one of many reasons for ANZ’s decision is the economic centre of gravity in the world is increasingly shifting to Asia and Vietnam will be among the region’s most important economies.

“Continued expansion in Vietnam is one of my priorities,” Smith affirmed, adding that the country’s retail banking market is opening up and has big potential.

A growing in GDP per capita and an increase in the awareness of the banking products available to people are among elements making good conditions for banks in the retail market, Smith said.
He also noted that the Vietnamese Government is trying to create a sound competition among banks when it applies an open policy and allows wholly foreign-owned bank branches to be set up in Vietnam.

Japan's Sumitomo Corporation starts operation in Vientam

Japan’s Sumitomo Corporation has inaugurated the Sumitomo Corporation Vietnam Ltd. Co. with a charter capital of 10 million USD and an investment capital of 30 million USD.

At the inauguration ceremony held in Ha Noi on November 8, Sumitomo Corporation’s President Motoyuki Oka said that Japan’s direct investment capital in Vietnam reached 1.3 billion USD in 2006, a year-on-year rise of 40 percent.

The result was attributable to the finalisation of the country’s legal system, he said.

The company would do its utmost to promote the Japan-Vietnam cooperative relations and hoped to receive continued support and assistance of the Vietnamese Government, he stressed.

German investor interest on the rise in Vietnam

German companies increasingly recognise Vietnam as a location for investment in Southeast Asia, said Jan Noether, chief representative of the German Chamber of Industry and Commerce in Vietnam.

Noether expressed this view after a workshop on Vietnamese investment environment, held yesterday in Ha Noi.

The workshop, entitled “ Vietnam – Land of Investment Opportunities in Southeast Asia”, drew representatives from 15 enterprises in many fields from Thuringen , Germany .

During the workshop, participants shared information and experiences on the investment environment in Vietnam .

“To date, German companies have invested in 94 projects in Vietnam , worth 426 million USD,” said Phan Huu Thang, general director of the Ministry of Planning and Investment’s Foreign Investment Agency.

Potential investors were also informed of investment conditions in Vietnam as well, as its legal system.

“ Opportunity for co-operations between our countries is huge given mutual respect and knowledge of the benefits to be gained,” Thang said.

Advantages and disadvantages of investing in Vietnam were also aired.

Vietnam has a stable political system and investment climate continues to improve, Noether said.

A young population and competitive productivity are among other advantages discussed.

Noether identified short-comings investors may face when choosing Vietnam such as: economic growth exceeds development of infrastructure, recent high inflation, the administrative cost of non-competitiveness and a shortage of skilled labour.

Despite this, investors from Thuringen regard Vietnam as a prime location for investment and believe future co-operations between Vietnamese and German enterprises will develop strongly.

Vice President welcomes Germany’s investors

Vietnam always welcomes foreign investors and will create all favourable conditions for JATRO AG group’s bio-energy project, Vice State President Nguyen Thi Doan told her German guest.

The Vice President was receiving a delegation from Germany ’s JATRO AG group, led by its President Dr. Christoph Weber, in Ha Noi on November 8. The German businessmen were on a working visit to look into opportunity to invest in the area of bioenergy.

Dr. Christoph Weber reported to the Vice President about his working session with the Ministry of Agriculture and Rural Development on a project to grow oil-containing plant (Jatropha Curcas) on infertile land to produce biological diesel and petrol.

According to Christoph Weber, about 20 countries are planting Jatropha Curcas for bioenergy and the project is suitable for Vietnam . The project should start in Binh Thuan and Ninh Thuan provinces, he said, adding JATRO AG group hoped to share experience with Vietnam in developing bioenergy.

Vice President Doan said she hoped that the project would help Vietnam minimize its dependence on the world’s petroleum resources, and help farmers, particularly those living in areas with infertile land, reduce poverty.

Japan's Olympus to open digital camera plant in Vietnam

Japan ’s Olympus Corp will build a new factory in Vietnam next year to produce hot-selling digital cameras, a company spokesman said on November 8.

“We will build a manufacturing base in Vietnam ..., as we aim to secure enough (production) capacity for digital cameras,” the official said, adding the company aims to begin construction by late 2008.

Investment will be some five billion yen (44 million USD), said the official who declined to be named.

The spokesman denied a report in the Nikkei daily the same day that Olympus would consolidate its two Chinese factories into one to transfer some operations to the base in Vietnam , where labour costs are lower. Olympus will build the Vietnamese base in addition to the two Chinese factories, he said.

“We picked Vietnam not because of cheap labour but to secure production capacity,” he said, adding Olympus had yet to announce details including the exact location of the Vietnam factory and planned production volume.

Olympus said on November 6 its net profits rose by almost 70 percent in the six months to September as it enjoyed brisk sales of digital cameras and medical equipment.

Vietnam starts 2 more hydropower plants with 92MW capacity

Binh Dinh: Nearly 1.8 trillion VND poured into hydropower plants

The People’s Committee of central Binh Dinh province has licensed projects to build the Vinh Son 2 and 3 Hydropower Plants with a combined investment of nearly 1.8 trillion VND (111.5 million USD).

Covering 669 ha, the new plants, invested by Vinh Son-Song Hinh Hydropower Joint Stock Company, are designed to have respective capacities of 80MW and 12MW.

Construction on the plants is expected to begin in early 2008 and complete in the fourth quarter of 2009.

As a result, the province will possess a total of four hydropower plants on upper Kon river, including the Vinh Son 1, 2 and 3 and a 60MW plant that serves the Dinh Binh irrigation work.

Vietnam's automobile sales surge in 1st 10 months

HANOI, Nov. 9 (Xinhua) -- Automobile joint ventures in Vietnam posted total sales of 58,230 vehicles in the first 10 months of this year, up 88 percent over the same period last year, according to a local industrial association on Friday.

In October alone, the country's automobile sales stood at 9,081units, increasing 125 percent over last October, said the Vietnam Automobile Manufacturers Association.

Last month, Toyota Vietnam kept on holding the biggest local market share, with 2,061 units sold, followed by Vinamotor with 1,268 vehicles and Truong Hai with 1,209.

Automobile joint ventures in Vietnam, sole producers of cars and main makers of other kinds of automobiles in the country, sold39,876 vehicles in 2006, down from 40,853 in 2005, said the association.

Last year, Vietnam with a population of about 84 million housed13 automobile joint ventures with total registered capital of nearly 700 million U.S. dollars and combined annual capacity of 173,000 units.

Besides, the country had dozens of local enterprises specializing in producing automobile parts and assembling simple vehicles.

Vietnam and German JV to start oil refinery construction progresses

The Hai Phong Paper Joint Stock Company (HAPACO) and its German partner, Evagor Company, will start the construction of a 1-million-tonne-per-year oil refinery in 2008 as preparatory work has completed.

The 150 million USD project will be built in Dinh Vu Industrial Zone.

The foreign partner will be responsible for 85 percent (128 million USD) of the project investment capital as well as designing consultancy, equipment supply, technology transfer and project operation in the first phase.

HAPACO will contribute the remaining 22 million USD.

The project is expected to put into operation by 2010. When completed, it will be the first oil refinery in the northern coastal area.

Vietnam benefits from ASEAN Bankers Association membership

Vietnam ’s accession to the ASEAN Bankers Association (ABA) has given domestic credit institutions experiences and cooperative opportunities with regional banks.

Governor of the State Bank of Vietnam Nguyen Van Giau made the remark at the 37th ABA Council Meeting in Ha Noi earlier this month. The development of professional personnel is the most important benefit that Vietnam ’s ABA member banks have gained over the past since joining the grouping, he added.

More than 800 bankers have been sent out to take part in training courses and fact-finding trips at banks in regional countries with help from the ABA , said Giau.

The association is planning to assist the State Bank of Vietnam (SBV) in upgrading its training centre into an institute, the governor added.

The SBV is coordinating with central banks of the Association of Southeast Asian Nations (ASEAN) to implement the Chiang Mai Initiative - a financial cooperation project between the ASEAN and its three partners, Japan , the Republic of Korea and China , which is aimed at working out a multilateral aid agreement with total funding of 80 billion USD.

The project is expected to help improve the capacity of each nation as well as the whole bloc to cope with possible financial-monetary crises.

Vietnam ’s central bank joined the ASEAN Swap Agreement that was designed to assist its members in dealing with payment balance difficulties, and contributed to the building of an accord on temporary exchange rates among ASEAN countries to promote trade and investment within the grouping.

In addition, the SBV has also played an active part at forums such as the ASEAN Central Bank Governors’ Meeting, the ASEAN Finance Deputy Ministers and Central Bank Deputy Governors’ Meeting, and the ASEAN Finance Ministers’ Meeting.

Vietnam Real Estate Market - Is It Due for a Crash?

The Vietnam real estate market is overheating but who has been buying up these properties? Surprisingly (or not), an estimated 60% of the purchasers who bought houses actually don't need a home but are buying and selling to make profit.

These purchasers are what we called speculators. So, what is driving the speculators to this market?

1. Recently, Pricewaterhouse chose HCM City to be in the top 10 real estate markets in the world with the greatest potential. (Yes, that's top 10 in the WORLD). Other areas such as Hanoi, Da Nang, Binh Duong, and Vung Tau have seen development sky-rocketed as well.

2. The government is allowing Viet Kieu and foreigners to buy houses (although they can't own land yet.)

3. Demand for homes keeps going up and up. Despite the torrid pace of development, the supply remains modest compares to the demand. But remember, the high "demand" is actually not from buyers looking for a home to live in but rather from speculators who buy and sell for profit. This is what we call flipping, which is partly responsible for the current housing slump in the United States.

4. Real estate analysts keep touting the market with estimates like 50% growth for 2008.

Speculators are definitely hard at work buying and selling and driving up real estate prices. It is a shame that those who actually need to purchase a home can't afford one in this market. It's ironic that Vietnam, which has one of the lowest income per capita in the world and yet its house prices are among the highest in the world.

The government of Vietnam is actually considering steps to force prices down such as revoking licences to projects which investors are leaving land idle or taxing speculators.

Despite the rosy forecast by analysts, it is going to be very difficult to keep the charade going for much longer. The 50% growth rate is just simply not realistic or sustainable for the next 2-3 years. We have already seen what happened to the real estate market in the United States and it's just a matter of time before Vietnam will face the same fate.

US firms eye Vietnam investment options

VietNamNet Bridge – Most business executives accompanying US Secretary of Commerce Carlos M Gutierrez on his ongoing official visit to Vietnam have shown keen interest in expanding their company's operations here.

More than half of the 23 US companies represented in the delegation which arrived for a five-day visit last Sunday are in the Fortune 500 and seek to increase imports from Vietnam and appoint agents and establish channels of distribution in the country.

Brady Southwick, general director of Cummins Diesel Sales Corporation in charge of operation and distribution in the northern and Southeast Asian regions, said his company had signed a memorandum of understanding with Viet Nam Motor Industry Corporation (Vinamotor).

A joint venture would be set up to manufacture diesel engines for trucks and buses both for the domestic market and exports, he added.

Bruce Quinne, deputy director of strategic development at Rockwell Automation group, which specialises in automation of information management, said his company was seeking local partners to boost sales.

Terex Corporation, a diversified global manufacturer of a broad range of heavy equipment, has plans to build an assembly and production facility in Vietnam.

Vietnam's PM tours storm-stricken Quang Ngai and Quang Nam provinces

Prime Minister Nguyen Tan Dung has urged authorities of central Quang Ngai and Quang Nam provinces to brace for the approaching typhoon Peipah while quickly overcoming the aftermath left by recent floods.

The PM, while touring natural disasters-stricken Quang Ngai and Quang Nam provinces on November 8, expressed his sympathies with families of victims on their losses and asked the two provinces’ authorities to enhance the relief work, sanitation improvement and disease prevention and control.

PM Dung also urged the two provinces to take drastic measures to fulfill its socio-economic development targets of this year.

The recent floods have caused great losses in human and property in Quang Ngai and Quang Nam.

In Quang Ngai, floods claimed 23 lives, left two missing and eight injured. More than 50,000 houses were submerged, nearly 500 others were destroyed. Total loss was estimated at VND 85 billion.

Meanwhile, natural disasters left 20 people in Quang Nam dead, two missing and nine injured. They also left many houses and inter-provincial roads in ruin and pulled more than 10,000 trees down.

Calling at the Dung Quat Economic Zone in Quang Ngai province, he asked the management board of the zone-based Dung Quat Oil Refinery Plant to speed up construction work and ensure safety for workers while focusing on personnel training to prepare for the plant’s trial run in June, 2008. The plant will be put into official operation in February, 2009. (VNA)

Vietnam ranks 68th in global competitiveness

Vietnam’s global competitiveness dropped four levels in the Global Competitiveness Report 2007-2008 which examined the economic climate in 131 countries, said the World Economic World on October 31.

According to the report, the main reason for the drop is that three out of eight countries added to the list took over Vietnam.

The United States tops the overall ranking in the Global Competitiveness Report 2007-2008. Switzerland is in second position followed by Denmark, Sweden, Germany, Finland and Singapore, respectively.

Global competitiveness is based on factors such as institutions, infrastructure, macroeconomic stability, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial markets sophistication technological readiness, market size, business sophistication, and innovation.

The Global Competitiveness Report includes the World Economic Forum’s Global Competitiveness Index, developed by Professor Xavier Sala-i-Martin, at Columbia University; the Business Competitiveness Index, developed by Professor Michael E. Porter, Director of the Institute for Strategy and Competitiveness at Harvard Business School as well as detailed profiles on each of the 131 economies covered and data displaying the relative rankings for more than 100 variables.

80,000 cars hit Vietnam’s roads in 2007

The Ministry of Industry and Trade has estimated that the number of locally made cars would hit a record 80,000 units this year.

By the end of September 2007, existing automobile factories in Vietnam had churned out 61,000 units. Of these, 12 automobile joint ventures output 32,000 units, while 47 domestic owned manufacturers made 29,000.

Foreign automobile manufacturers have done well in Vietnam since they hit the market in 1990. 2006 was the only year that witnessed unsatisfactory business results when output decreased by 7,000 units compared to 2005.

In fact, the joint ventures have been making big leaps since 2003: they output 50,636 units in 2003, 54,000 units in 2004, 67,000 units in 2005, and 60,000 units in 2006.

From 1990 to 2006, automobile joint ventures have produced 270,000 units of different kinds and paid nearly $1.5bil towards the state budget both while creating over 50,000 jobs.

When granted investment licenses, foreign automobile joint ventures all committed to gradually increase the localisation ratio of car products. Toyota Vietnam has a localisation ratio of 33% in 2007 for its Innova and it is expected to raise the ratio to 45% by 2008 when it will assemble 19,000 units a year.

Still though, local production proves to be very low and the manufacturers have been facing sharp criticism from policy markers and the public for not fulfilling their localization commitments.

Meanwhile, domestic owned enterprises have made considerable progress in making vans and commercial vehicles. The Vietnam Motor Corporation (Vinamotor), the Vietnam Engine and Agricultural Machinery Corporation (VEAM), Vietnam Coal and Mining Industries (Vinacomin), Truong Hai Automobile Company (Thaco), Xuan Kien Automobile Private Enterprise (Vinaxuki) and Saigon Automobile Corporation (Samco) all have become the members of the Vietnam Automobile Manufacturers (VAMA), which was previously dominated solely by foreign automobile joint ventures.

Vinacomin’s vehicle output is now just enough to serve the demand of the group itself, while its products prove to be competitive when compared to imports thanks to a high localisation ratio and soft prices.

US Commerce Secretary Visits Vietnam

HANOI, Vietnam (AP) — U.S. Commerce Secretary Carlos M. Gutierrez met with Vietnamese Prime Minister Nguyen Tan Dung on Monday morning as he began a three-day visit to expand economic ties between the two countries.

"The people and the government of Vietnam are very delighted with the fine cooperation between the United States and Vietnam," Dung said, welcoming Gutierrez at the prime minister's office.

"I believe that your visit will help further strengthen the development of relations between our countries, particularly in trade and investment," Dung said.

Gutierrez and a delegation of U.S. trade officials and business leaders were to meet with President Nguyen Minh Triet at the presidential palace later Monday morning.

They were also scheduled to meet with Vietnamese and U.S. businessmen in Hanoi and the southern business hub of Ho Chi Minh City.

Gutierrez was accompanied by representatives from 23 American companies, including Dow Chemical Co., Ford Motor Co., 3M Co., Alcoa Inc., and Northwest Airlines Corp.

The visit was the first Cabinet-led U.S. business mission to Vietnam since the communist country was admitted to the World Trade Organization earlier this year.

Vietnam is one of the world's fastest-growing economies, and the U.S. delegation hopes this week's business development mission will expand the market share of American companies in the country, which fought the U.S. in a war that ended in 1975.

Two-way trade between the United States and Vietnam grew from $1.5 billion in 2001 — when the two signed a bilateral trade agreement — to $9.7 billion last year.

ADB pledges to loan Vietnam $1.1 bln for expressway construction

The Asian Development Bank (ADB) has pledged to loan Vietnam nearly 1.1 billion U.S. dollars for the construction of the first phase of the Noi Bai-Lao Cai expressway, local newspaper Vietnam News reported Monday.

ADB's Ordinary Capital Resources will provide 896 million dollars, while the other 200 million dollars will come from the bank's concessional Asian Development Fund. The total amount needed for the first phase of the project is estimated to be over 1.2 billion dollars, and the remaining 120 million dollars will be met by a bond issuance.

Vietnamese Prime Minister Nguyen Tan Dung recently asked the State Bank of Vietnam to complete all related documents to prompt negotiation and signing a credit agreement with ADB.

The expressway will link Hanoi with the northern Lao Cai province bordering with China's Yunnan province, joining China's Kunming-Hekou Highway at Quang Kim commune, Bat Xat district in Lao Cai.

Source: Xinhua/Agencies

Vietnam's port problems continue

VietNamNet Bridge - Vietnam’s economy has displayed great growth in the past few years, boosting trade between the country and international markets. However, Vietnam’s ports poor infrastructure is hindering the economy’s development, writes Ngoc Linh.

Before kicking off a recent conference in Hanoi covering Vietnamese ports and logistics, organisers were sceptical over how many people it would attract.

However, the conference room became too small when representatives from local and international companies such as Maersk Vietnam, Nike Vietnam, APL Vietnam and DP World rolled up for the two-day conference. Late-comers even had to stand because all the seats were occupied. The overwhelming response underscores how Vietnam’s port development has become a major source of concern for local and international companies.

The country’s impressive growth over the last several years has made Vietnam more attractive to international companies, but Vietnam’s rapid economic growth has not been matched by rapid infrastructure development. Vietnam’s underdeveloped ports have become an impediment to those who wish to expand their business to Vietnam.

Master plan needs to be renewed

With 3,200 kilometres of coastline, Vietnam has 266 ports, about 144 of which are seaports stretching from north to south. However, most ports are relatively small with obsolete facilities and poor support services.

Under economic development pressure, investment capital is being pumped into port projects nationwide. More and more ports are being renovated and updated to meet international standards.

“We expect $4.5 billion to be invested in ports in the next five years,” said Tan Hua Joo, managing director of APL Vietnam Company, an international shipping firm in Vietnam.

In the north, seven leading domestic firms including Vietnam Shipbuilding Industry Group (Vinashin) and the Bank for Investment and Development of Vietnam last March announced they would build the Hai Ha port complex in Quang Ninh province, 100km from Quang Ninh’s Cai Lan seaport and 200km from Haiphong seaport. Meanwhile, the country is calling for investment into Lach Huyen deep-seaport in Haiphong, which could cater for vessels up to 80,000 dead weight tonnes (dwt), with the total investment capital of about $1.6 billion.

In the south, Saigon Port will be relocated to Cat Lai and Hiep Phuoc ports in Ho Chi Minh City and Cai Mep-Thi Vai port complex in Ba Ria-Vung Tau province. The new ports will not only resolve size and traffic issues, but also be more efficient as the new port complex is located conveniently among the region’s industrial parks and export processing zones of Ho Chi Minh City and Binh Duong, Dong Nai and Ba Ria-Vung Tau provinces.

Six investors were granted investment certificates for developing ports in the Cai Mep-Thi Vai port complex such as SP-PSA international port, Saigon International Vietnam and Saigon Premier Container Terminal.

Many seaports are located in the central region between Ha Tinh and Khanh Hoa provinces, including Vung Ang, Chan May, Danang, Ky Ha, Dung Quat and Quy Nhon ports.

Vietnam is also calling for investment for the Van Phong international deep-seaport in Khanh Hoa province, which could become a hub for transiting goods to compete with regional international transiting rivals.

However, these central region ports are operating under capacity. Last year, central region ports handled only 3 per cent of the country’s total cargo volume, while Ho Chi Minh City boasted 72 per cent and Haiphong 22 per cent.

Joo said Vietnam should focus on developing one or two international deep-seaports. “New port developments must be focused on the key cargo origins of Ho Chi Minh City and Haiphong,” said Joo.

He said a government plan to invest $3.5 billion by 2020 to turn Van Phong Bay in Khanh Hoa into a transhipment hub might lead to inefficiency as Vietnam’s central region would not be a major area for cargo movements.

Nguyen Thu, vice chairman of Vietnam Seaports Association, said: “The rapid increase in number of ports also created a price racing situation, where Vietnamese ports have reduced their price to attract customers. The direct results are lower service quality and an inability to reinvest into port development.”

Deputy Minister of Industry and Trade Nguyen Thanh Bien said the existing port development master plan, which was issued in 1999, was not suitable for the country’s current development.

“Many things have changed and we need a study and a new port development master plan to meet economic development requirements,” said Bien.

Although investors are pumping money into developing key ports in the country, the lack of supporting inland infrastructure is hindering port development.

For instance, Haiphong port complex could handle vessels up to 40,000dtw, but only ships below 10,000 tonnes can gain access to the port due to its limited access channel. Others have to dock at distant transshipment points. This common problem arises at Dinh Vu port in Haiphong city and Quang Ninh province’s Cai Lan port.

“This could lead to the increase of handling costs from $3 to $5 per tonne of cargo and many business opportunities have been missed because both the carrier and shipper did not accept that handling price,” Vuong Dinh Lam, director of Vietnam Maritime Administration, said.

Cai Mep-Thi Vai port complex investors are also facing difficulties when developing their projects due to inadequate infrastructure and channel access. Due to the lack of inland infrastructure, the construction of some terminals will have to be done from the water’s edge which will negatively impact on construction timelines planned to be completed in 2009 or 2010.
Amanda Tucker, general director of Nike Vietnam, said shippers were facing a lack of a sufficient highway and bridge infrastructure to move freight from factories to terminals.

Phu My bridge and No.2 Ring Road around Ho Chi Minh City are attracting attention from shippers as well as port operators. The project was originally scheduled for completion in 2007 which has been pushed out to December, 2009. The long-awaited project would greatly relieve cargo traffic congestion in the Ho Chi Minh City and provide needed access to the new Hiep Phuoc terminal.

Besides the Ho Chi Minh-Long Thanh and the new Bien Hoa-Vung Tau highways, plans to dredge the entire access channel to the Cai Mep-Thi Vai terminals to a minimum depth of 14 metres and dredge the access channel to 10m in Hiep Phuoc port is still unclear.

Vietnam Seaports Association’s Nguyen Thu said if landside infrastructure and access channels were not adequately developed investment in Vietnam’s ports would be wasteful. He said: “Some countries use port and infrastructure facilities as the primary competitive advantage for the entire country and Vietnam may have this opportunity. The concern is that if the current problems are not fully addressed, the infrastructure situation in Vietnam may become a competitive disadvantage for the country.”

Impacting on the country’s economy

In 2006, Vietnam’s exports grew significantly to $39.5 billion. Consequently, Vietnam’s freight infrastructure network and long-term development strategy is of critical importance not only to exporters, but also to the future health of Vietnam’s economy.

Currently, Vietnam’s ports are handling 80 per cent of the country’s imported and exported cargo. Due to the lack of deep-water ports, Vietnamese cargo must transit in foreign ports like Singapore or Hong Kong before being transported to international markets. Transshipment means additional handling of shipments, which is more expensive. Consequently, the added shipping costs drive up product costs and can help to decrease Vietnam’s advantages over China or Thailand. Vuong Dinh Lam said that the transport costs have increased from $101 to $231 per 20-foot container. This makes Vietnamese products lose their competitiveness in international markets.

Tucker said with likely growth of 25 per cent to 30 per cent, the capacity shortage for shippers is likely to be more than 300,000 TEU.

“This means shippers can expect delays in loading containers on feeder vessels in 2007, especially during the peak shipping season.

“Current business operators are already looking at contingency plans should port and road congestion reaches crisis levels. These concerns and the likelihood of near term major port congestion could very well be undermining Vietnam’s potential to reach its economic growth potential,” said Tucker.

New $5 million Italian chemical plant for Vietnam

New $5 mil factory for Quang Nam

A major new factory, which makes chemicals for the construction industry, opened yesterday in Quang Nam Province.

The $5.2 million Mapei Vietnam factory in the Bac Chu Lai Indus-trial Park will produce admixtures for concrete, products for wooden floors, stone materials, protective wall products and decorative coatings.

The Italian owned, 50-technician factory has a daily capacity of 150 tons and aims to produce 70 percent for local markets and 30 percent for export to Cambodia and Laos.

Reported by Dang Ngoc Khoa

Vietnam’s October industrial production up 17%

Nhan Dan – Industrial production in October is up 16.7% against the same period last year, according to the Ministry of Planning and Investment’s General Statistics Office.

Thus, the total industrial production in the January-October period increased by 17% year-on-year.

Specifically, the State-owned sector’s industrial production value is up 20.8% while the figure for the foreign direct investment sector stood at 18.2%.

Vinh Phuc topped all localities in the country in terms of industrial production value growth, at 42.1%, followed by Binh Duong, 24.5% and Tay Ninh, 23%.

Some localities such as Ho Chi Minh City, Thanh Hoa and Khanh Hoa registered a growth of around only 12%.

Southern Ba Ria-Vung Tau province was the only one that saw a decrease, down 1.1%.

Foreign firms to develop oil refinery in Phu Yen Vietnam

VietNamNet Bridge – The UK's Technostar Management Ltd. and Russia's Telloil will build an oil refinery at a total cost of US$1.7bil in the central province of Phu Yen. Vice Prime Minister Hoang Trung Hai has given approval to the province to issue an investment certificate to the two investors to establish a new company for the project. The Vung Ro project, with 51% ownership by the UK firm, will become the first wholly foreign-owned oil refinery to be built in the country. Vung Ro will be the country's fourth oil refinery and is expected to supply the domestic market with four million tons of petroleum products annually. The department plans to deliver the investment certificate to investors by next month in order for construction to begin next year. Under the agreement, Hai requested that the Vung Ro developers complete an environmental assessment report before commencing construction and to utilize modern technology to build the refinery. The two firms will develop the project on a 200-hectare plot near Vung Ro Seaport in Tuy Hoa District due to its optimum access to traffic. Technostar Management initiated plans for the oil refinery more than two years ago and plans to invest some US$500mil. The refinery's capacity will total three million tons of petroleum annually using crude oil from PetroVietnam. Investors have also found a stable supply of crude oil from the Middle East and will increase investment capital and product output. The country's three other oil refineries are located in Quang Ngai, Thanh Hoa and Ba Ria-Vung Tau provinces. When all four oil refineries are fully functional, their combined production output will total 20mil tons of petroleum per year through 2012. Also in Phu Yen Province, Singapore's SP Chemicals has plans to develop a petrochemical industrial park project. The Hoa Tam Petrochemical Industrial Park will begin accepting projects in 2009 and is estimated to attract US$11bil, with US$5bil coming directly from SP Chemicals and the remainder from other investment partners. The company received approval from the prime minister in early August to begin building infrastructure for the industrial park and the petrochemical complex in the central coast province. Under the company's plan, US$1.5bil will be invested in the first phase of the project scheduled from 2009-2014 to develop Hoa Tam into a petrochemical industrial zone with a port capable of holding ships up to 250,000 DWT. During the first phase, SP will also develop a naphtha cracking petrochemical complex project using local and imported materials. The complex will have the capacity of 800,000 tons of ethylene a year.

Vietnam press overview - October 31

HANOI, Oct 31 (Reuters) - These are some of the leading stories in the official Vietnamese press on Wednesday.

VIETNAM NEWS

-- Demand for coal from power plants was expected to jump to 49 million tonnes by 2015 from 5.2 million tonnes next year, Vietnam Electricity said.

-- Trade between Vietnam and Japan will reach $12 billion this year, up 21 percent from 2006, with about $7 billion in exports to Japan from Vietnam.

- - - -

SAIGON GIAI PHONG

-- The government has ordered the removal of all remaining regulatory obstacles to create the best conditions for the private sector to do business.

- - - -

LAO DONG

-- The Ministry of Construction ordered the Ho Chi Minh City government to investigate pre-construction sales of several major condominium projects, including the Vista complex by Singapore's CapitalLand, after state media accused investors of taking deposits illegally before laying the foundations.

- - - -

TUOI TRE

-- Bird flu returned to unvaccinated poultry in the northern province of Nam Dinh, the third province to report H5N1 outbreaks this month, the Animal Health Department said.

- - - -

THANH NIEN

-- A tornado knocked down a classroom, injuring 20 schoolchildren and a teacher in the central province of Thua Thien-Hue.

-- The government has given approval to state-run Vietindebank to take a 25 percent stake in a venture to build a highway linking Ho Chi Minh City and the Mekong Delta city of Can Tho.

- - - -

THOI BAO KINH TE VIETNAM

-- The central bank said it would sell more notes with maturities of between 28 days and 364 days in open market transactions to control a dong surplus and curb inflation.

-- Companies with foreign direct investment have protested against a policy of the Labour and Planning and Investment Ministries to collect fees for trade union activities in their institutions. They said the fees that go into effect in early 2008 are not in line with international practice.

Japan-Viet Nam trade to reach 12 billion USD

Bilateral trade between Japan and Viet Nam will reach 12 billion USD this year, according to the Ha Noi Young Business Association (HYBA).

The figure represents a year-on-year increase of 21 percent. Of the 12 million USD, Viet Nam is expected to post exports of 6.5-7 billion USD.

“For Viet Nam , Japan is a market with very good potential because it has big buying power, while Vietnamese products in Japan occupy just 1 percent of its total imports,” Dang Duc Dung, deputy chairman of HYBA said on October 30 at a meeting to share export experiences to Japan .

Furthermore, he said Japanese enterprises have started to pay Viet Nam more attention, while a number of Japanese enterprises have started to open representative offices here. As a result, now is a good opportunity for Vietnamese firms to promote trade with Japan , HYBA said.

According to Nguyen Bao, chief of the Asia Pacific Department, under the Ministry of Industry and Trade, seafood was single biggest export to Japan . Since 2004, shrimp exports, at 23 percent, have held the biggest market share.

Annual shrimp exports are worth 450 million USD, while squid exports to Japan , which rank fifth at 7.6 percent, are worth 92 million USD.

Combined, these two seafood exports are worth 550 million USD, representing over 18.3 percent of Viet Nam ’s total seafood exports.

“Previously, seafood exports to this market faced many difficulties in terms of hygiene requirements. But in recent years, the quality has risen markedly. It contributed significantly to the country’s exports, which helped Viet Nam grab the market share in this demanding market,” Bao said.

He added that timber products also had great export potential in Japan . At present, timber exports have grown on average by 13 percent annually, and last year were worth 286 million USD, making Japan the second biggest consumer behind China .

“At present, demand for timber products in this market is very high because [in Japan ] there is a domestic shortage of materials, while labour costs are high. As Japan begins importing more of this product then it could push up Viet Nam ’s total exports in future.”

Aside from textiles and garments, handicrafts and fresh vegetables also have enormous potential in Japan , Bao said. He advised Vietnamese enterprises to promote their products more in Japan , but warned that quality and hygiene standards had to be maintained.

“ Japan always welcomes Vietnamese exports and has provided channels to boost bilateral trade. JETRO hopes Viet Nam will be a regular supplier to our market in future,” Takano Koichi, deputy chief representatives of the Japan External Trade Organisation said.

Vietnam to have first wholly foreign-owned oil refinery

The Vietnamese government has approved a plan that will allow the country’s first wholly foreign-owned refinery to be built in central Phu Yen province, according to local newspaper Vietnam Investment Review on Monday.The proposed 1.7-billion U.S. dollar Vung Ro project, to be developed by the UK’s Techno Star Management in partnership with Russia’s Telloil, is scheduled to supply the domestic market with four million tons of petroleum products each year.

“The in-principle prime ministerial approval has allowed us to issue an investment certificate. I expect the certificate handover ceremony will be held next month, so investors can start building the refinery early next year,” said an official from the Phu Yen Planning and Investment Department.

If construction proceeds on schedule, the Vung Ro oil refinery should become operational in 2012 when Vietnam’s annual demand for petroleum products are estimated to surge to 20 million tons from 12.5 million tons in 2006.

To meet rising domestic demand, the state-run Vietnam National Oil and Gas Group (PetroVietnam) is working on three oil refineries - two in central Thanh Hoa and Quang Ngai provinces, and one in southern Ba Ria Vung Tau province with a combined production output of some 20 million tons per annum.

U.S. company Semtech in partnership with local firm Vien Dong Trading and Investment Company are expected to invest 360 million dollars in developing an oil refinery with annual capacity of 2 million tons in southern Can Tho city.

Vietnam imported 9.2 million tons of petroleum products worth 5.1 billion dollars in the first nine months of this year, up 8.0 percent and 9.4 percent over the same period last year, respectively, according to the country’s General Statistics Office.

Meanwhile, it exported over 11.2 million tons of crude oil totaling nearly 5.8 billion dollars, posting respective year-on-year declines of 10.4 percent and 11.3 percent.

Petro Vietnam to list transportation unit on stock market

PV Trans plans listing to increase oil fleet

Procedures are underway for the crude oil transporter PV Trans to list on the HCM City Stock Exchange in mid-November, according to a company official.

Pham Viet Anh, general director for Petro Vietnam Transportation Corp. (PV Trans), said the reference price was set at 120,000 VND (7.8 USD) but added that there may be some adjustment.

With little foreign investment, the company is 60 percent owned by Petro Vietnam and has a chartered capital at 720 billion VND.

The company plans to increase its capital to 9.9 trillion VND by 2015 to expand its business, said Anh. Early next year, the company will double its capital to 1.44 trillion VND.

In anticipation of market demand, PV Trans estimates it will need almost 3 billion USD to build 44 new ships by 2015. Currently the company has two tankers for shipping crude oil mainly on international routes, each with a capacity of 100,000 tonnes.

Parent company PetroVietnam will export around 18 million tonnes of crude oil annually until 2009. By then, the oil refinery factory in Dung Quat will begin operation, and the export volume will decrease. Foreign tankers account for most of the exported volume.

Apart from the Dung Quat factory, PetroVietnam is developing a refinery in Thanh Hoa and another in Ba Ria – Vung Tau Province . Therefore the volume of crude oil shipped to and refined products coming from the company’s factories will increase, said Anh.

Due to expected market demand and new investments, PV Trans predicts a turnover of 100 million USD in 2010 and 600 million USD in 2015, with profit yields of 12 million USD and 125 million USD, respectively.

This year, profit is expected at 30 billion VND (1.85 million USD). Company officials attribute the low profit to their decision to make investment in new ships a priority. (VNA)

Vietnam's SE Asian rail links

The New Silk Road: rail links from China

As energy jitters continue to rattle the global economy, regional alliances are being solidified to ensure that China will remain a viable and growing economy as oil depletion becomes a permanent fixture of our daily lives. As cheap trans-oceanic shipping of non-essential goods goes the way of the dinosaurs, these new partnerships will help realign global trade, and as a result, regional diplomacy.

This process has already begun. Consider, for example, the story of a peace deal between North and South Korea, which recently appeared on the front page of the China Daily newspaper. "Korean Pact Seeks to End War" blares a headline proclaiming that the two Koreas want a permanent peace regime that will allow regular freight railway service along tracks crossing the Demilitarized Zone between them.

Global shipping by air and sea, just-in-time ordering and an endless supply of factory orders have been the bread-and-butter of the modern Chinese economy. It is precisely those systems that will bring this economic juggernaut to its knees if measures are not taken to assure access to a trade zone stretching from Western Europe to Vladivostok in Russia, Mongolia in the north, India in the west and all the way to Singapore at the edge of Southeast Asia.

If you take a close look around our world and map out what is manufactured in which nation, you will find heavy industry in China, factories for daily use products spread from Vietnam through China to South Korea, high-tech goods in Japan and Taiwan, raw materials and resources in all parts of Asia, including gas and oil exports from the Middle East, central Asia and Russia. The Eurasia zone is already connected by pipe, rail networks and a telecommunications hub in India, but today’s connections are by no means complete. With construction of a few sections of rail, however, there can be a spider web of steel rail linking it all, despite different rail track standards – some narrower gauge, some wider – creating logistical problems.

Currently, a large concentration of the world’s energy resources, raw materials, factories, communication and production centers are in the Asia zone. Outsourcing factory production from the West has been a blessing for this region. Factories of every conceivable type are in China and the Information Technology revolution where an optic fiber world is now connected to India’s cheap labor and English-speaking skills.

With the groundwork laid, let’s take a trip along the new Silk Road, beginning with the rail links that will allow a newly aligned Eurasian trading bloc to emerge. In this zone, China will be the economic powerhouse.

Peace in Korea: The new China-brokered Korean peace initiative to end the Korean War will open rail links through North Korea to the sea port of Pusan, the closest jump off point to Japan. For comparison, sea delivery from Pusan is just half-a-day by sea, but three days from Shanghai. All production in the northeast section of China will use this route. Japan is extremely vulnerable to shipping disruptions as most of what is consumed in daily life or manufactured using energy is delivered by ship to that nation.

The Vietnam Connection: Rail networks are extensive throughout the Mekong Region, but a small 250-kilometre section of rail will be needed from Ho Chi Minh City to link Phnom Penh, and within Cambodia an 80-kilometre line constructed from Sisophon to Aranyaprathet, Thailand. When these sections are complete, the links in Thailand will access the rest of Southeast Asia all the way to Singapore. Presently there is a great deal of outsourcing from China to Vietnamese factories that produce labour-intensive, 100 per cent handmade items. Again you can see the economic mutual benefit trump card being used to China’s advantage to secure land passage.

Myanmar: The old capital Rangoon is no longer used as a governmental seat, but a new city called Naypyitaw has been constructed 400 kilometres to the north to take its place. The move north puts the new capital more or less in a line with rail connections out of Yunnan Province in China, and onto Aizawi in India’s northeast state of Mizoram and a second line could easily be installed to link up at Imphal in the northeast state of Manipur, accessing all of India. China is giving lip service to the UN censure of the Burmese regime over the slaughter of protesters, including monks. Don’t expect them to push strongly for change in Burma until they know which side will triumph. Right now, China has just what it wants; Western sanctions on Burma leaving the country open for exploitation by Chinese business, with the possibility of new Chinese controlled transit routes to ocean ports along that coast, and rail links to India.

Foreign direct investment will continue to pour in as China’s central location makes it the transit hub of the new Eurasian trade bloc for those businesses that want ready rail access to the Koreas, Japan, India and Southeast Asia. Gas and oil pipelines will follow the same model, but instead will be a conglomeration of Kazakhstan, Tajikistan, Turkmenistan, Kyrgyzstan and Uzbekistan that will link to the far west Chinese province of Xinjiang. From now to 2010, the Chinese government plans to complete an additional 19,800 kilometres of new tracks and upgrade 15,000 kilometers of existing routes, most of it in the western provinces of Yunnan, Xinjiang and Sichuan. Additionally, a second natural gas pipeline from the Xinjiang region to Shanghai is now beginning construction and will be 4,200 kilometres in length.

Sea-borne cargo will become more regional, but with navies from other countries patrolling coastal waters, land delivery routes by rail are essential. This puts China in an advantageous position to have both land and sea links with Europe, Russia and the Middle-East, if their plans come to fruition.

Trade routes from Europe to China were established over a thousand years ago using camels and fortified positions against hostile threats to commerce. Along the modern Silk Road, transport locomotives will chug along burning coal or heavy-sulfur fuels. This will allow a realignment of trade in Eurasia as we pass into a post-peak oil reality that will re-define civilization.

First published in the Energy Bulletin on 20 October, 2007.

Vietnam goes on aircraft buying spree

Prime Minister Nguyen Tan Dung last week returned from the United States and France with news of a massive boost for Vietnam Airlines.

Vietnam Airlines’ rapid expansion mirrors the economy’s spectacular growth Dung witnessed the national carrier to commit to buying 12 Boeing B787s worth $1.8 billion while in New York and 10 Airbus A350s and 20 Airbus A321s, with a $3.7 billion price tag, while in France. Nguyen Sy Hung, Vietnam Airlines chairman and CEO, said the first Boeing B787 would be delivered by 2015, the first A350 by 2014 and the first A321 by 2012. The airline hopes to increase its fleet to 86 planes by 2015 and 110 by 2020. “The new deals are an effort to modernise the fleet in order to reduce costs and improve the quality of services, laying the foundation for expanding our flight network and enhancing our competitiveness in domestic and international markets,” said Hung. Although the aviation pact was the largest to be signed during the French trip, there were other key deals struck with the country’s former colonial ruler. Vietnam signed close to $6 billion in other agreements, including the deal between the Vietnam Garment and Textile Corporation (Vinatex), the Tin Nghia company and the BNP Paribas to issue Vinatex bonds worth $500 million. An additional $500 million contract between the Bank of Agriculture and Rural Development and Merrill Lynch to aid Vietnamese coffee growers as well as a $250 million offer sheet between Alstom and Vietnamese partners to supply equipment for the Son La hydro electricity project were also forged during the meetings. At the Vietnam - France Business Forum in Paris, the prime minister said that Vietnam was a potentially huge market with an abundant and cheap workforce farmed in an environment of political and social stability. In addition, the Vietnamese Government is doing its best to accelerate administrative reforms in order to create a clear, transparent and favourable investment environment for foreign investors. Dung reiterated that French businesses would find Vietnam a good destination for their investment as there was a large French-speaking community in the country. During his meeting with French Prime Minister Francois Fillon, Dung also expressed his hope that French investors would increase their business interests in Vietnam, especially in the areas of transport infrastructure, energy, information technology and space aviation. For his part, Fillon said that Vietnam was a destination marked for success and that France would need to introduce measures to increase its investment and trade relations with the country. “In the near future, we will send many business missions to Vietnam in order to boost bilateral investment and economic ties,” said Fillon. He also said the agreements and contracts that had been signed by the two governments and the two business communities were only the beginning of many important economic activities that will run in the future. Herve Bolot, French ambassador to Vietnam, said that Dung’s visit to France was one more affirmation of the close partnership between the two countries. “France has been one of the leading foreign investors in Vietnam for a long time. There are several big French investment projects which are waiting for Vietnam’s approval,” said Bolot. He also said that French investment would increase in the sectors of energy, telecommunication, health care and tourism.

Vietnam's Dung Quat Economic Zone investment to be raised

Dung Quat investment to be upped

Investment into projects at the Dung Quat Economic Zone, the site of the country's first oil refinery, will be increased as part of a new plan announced by the Quang Ngai Province People's Committee Monday.

Around US$2 million per hectare of heavy industry and $1 million per hectare in light industry will be raised. Nearly $1 million per hectare of infrastructure, and $700,000 per hectare of trade and services will also be raised, according to the provincial People's Committee. Projects that will be given top priority include those with high investment capital, modern technology, low pollution and especially projects using local labor. So far, 125 investment projects have been licensed, generating more than US$8.64 billion in registered capital at the site.

Vietnam 6th most attractive investment destination in world

Golden investment days are dawning

Vietnam’s investment planners are forecasting a massive surge in the foreign direct investment capital on the back of the country’s recent diplomatic successes.

Heavy-weight investor are turing promising talk into reality At an investment promotion workshop in Hanoi last week, Phan Huu Thang, chief of the Ministry of Planning and Investment’s Foreign Investment Agency (FIA), said Vietnam’s new role as non-permanent member of the United Nations Security Council, as well as its position as sixth most attractive investment destination in the United Nations Conference on Trade and Development (unctad) rankings would be milestones in attracting future foreign direct investment. According to a survey conducted by the Asian Business Council, Vietnam ranked third for investment attraction among Asian nations in the 2007-2009 period, after China and India. In a report released in July by the world’s largest business consulting group, PricewaterhouseCoopers, Vietnam was ranked among the top 20 newly emerging economies for investment in production. China was ranked second. “I have confidence that Vietnam’s newly-registered FDI capital this year will exceed $13 billion - a significant rise from the previously planned $11-12 billion. In parallel, the FDI disbursement rate is also much better than ever before,” he said. South Korean firm Posco’s $1 billion steel project in the south and E-United and Taiwan Steel’s $3.3 billion steel complex in the centre partly back the FIA chief’s statements. FIA figures indicate that Vietnam received $11.26 billion in newly-pledged and extended FDI capital between January and October of this year, up 36.4 per cent over the same period last year. Meanwhile, the actual capital disbursed rose 18.7 per cent year-on-year to $3.7 billion. Korea’s Trade-Investment Promotion Agency (Kotra) applauded Vietnam’s potential in FDI. “Vietnam’s economy will grow dynamically in the coming years. WTO accession and the Korea-Asean Free Trade Agreement will draw more attention. More and more Korean investors are thinking of Vietnam as a promising destination for their capital,” said a Kotra representative. “Low manufacturing costs, geographical location and political stability are Vietnam’s forte,” he added. According to Kotra figures, as of September this year, Korea was the leader in terms of FDI in Vietnam with a total registered capital of $11 billion in 1,635 projects. In 2007 alone, Korea will register an estimated $2.1 billion, three times more than in 2005, thereby maintaining its top position among foreign investors. Similarly Japan, among the top-five foreign investors in Vietnam, has seen FDI surge in the last seven years. Figures released by Japan’s Mizuho Corporate Bank at the workshop showed that Japanese investment in Vietnam rose from $81 million in 2000 up to almost $1.1 billion last year. “The reasons for the sharp rise in Japanese investment in Vietnam are increased risks in investment in China, increased production costs in Vietnam’s neighbours,” said Toshihiro Mitsui, general director of the bank’s headquarters in Vietnam.

Vietnam targets $52.5 billion in FDI

By Rita Raagas De Ramos, | 1 November 2007 Read this article online at: http://www.financeasia.com/article.aspx?CIID=95885

The government needs $150 billion to support its economic growth targets until 2010 and 35% of that is expected to come from foreign investors.

The government of Vietnam is targeting an average gross domestic product (GDP) growth of 8-8.5% from 2007 to 2010, and it is counting on foreign direct investments to achieve that goal, according to a senior government official. “We plan to raise $150 billion for economic development (to meet the GDP growth target), in which foreign capital accounts for 35% ,” says Phan Huu Thang, director general of the Foreign Investment Agency of Vietnam’s Ministry of Planning. Given those goals for economic expansion and fund raising, attracting foreign direct investment (FDI) is a top priority for the government, says Thang, who made the comments at the Funds World Vietnam 2007 conference being held in Ho Chi Minh City this week. Several industries are among the priorities for attracting FDI. These include new materials and energy production, technology, agriculture, infrastructure, and human development, to name a few. Last month, Vietnam released a list of more than 160 projects that need FDI from now until 2010. “We would like to send a positive signal to the foreign investor community about the determination of the government in speeding up intensive economic reform and international economic integration process,” Thang says. Vietnam’s FDI commitments totaled $11.2 billion in the first 10 months of 2007, and the figure is expected to reach $15 billion by year-end, Thang notes. So far this year, foreign firms in Vietnam have disbursed $3.71 billion in investments. From 2001 to 2005, Vietnam’s GDP has grown at an average of 7.5% annually. Last year, GDP grew by 8.2% and this year’s growth is expected to top that at 8.5%, which will be the country’s highest growth rate within the last 10 years. Thang is confident Vietnam will be able to attract a steady flow of FDI in the coming years, noting the often cited reasons that include the country’s strong economic growth prospects itself and its entry into the World Trade Organization this year and the reforms that go with that. Other reasons include Vietnam’s efforts to hasten the so-called equitisation process of state-owned enterprises. In 2006, more than 950 state-owned were transformed, and 600 of those were equitised. Thang expects another 600 state-owned enterprises to be equitised by year-end. In Vietnam, equitisation refers to the first of two stages involved in getting a Vietnamese company onto the stock markets. The most common equitisation process in Vietnam involves a company launching an IPO to turn itself into a shareholding concern first and then placing private offerings. Investing directing in companies in Vietnam is one of the best ways to position ahead of that country’s economic growth, according to some fund managers in attendance at the Funds World Vietnam 2007 conference. They note that foreign ownership limits tend to contain the amount of exposure foreign investors can have in Vietnam’s stock market, which has been among the best performers in Asia in recent years.

SOCO International Vietnam Drilling Update

VN-1X Well

The Company's majority owned subsidiary, SOCO Vietnam Ltd., announces that the Voi Nau (VN-1X) well, the first well on Prospect "AA" in Block 16-1, will be plugged and abandoned after reaching a total depth of 3,130 metres. The well was drilled on a four way closure to evaluate the Oligocene section that was productive in Voi Trang. While the well encountered oil shows, the sands were poorly developed and had insufficient porosity to warrant testing.

TGD-1X Well Testing

Following this well, the rig will return to the Te Giac Den 1X ("TGD-1X") well on Prospect "E". As announced on 30 July 2007, the TGD-1X well encountered hydrocarbons in two Oligocene clastic sequences, which were separated by a volcanic layer. Well logs over the upper sequence indicated approximately 30 metres of net pay. After drilling through the volcanics, the well also encountered a deeper high pressure clastic sequence with oil and gas shows. A further 300 metres of sediment is interpreted above the Basement.

Although equipment is now assembled that would enable the section above the volcanics to be tested, detailed analysis of the well, including the benefit of drilling with the high pressure blow out preventer, testing multiple high pressure zones and the extent of the potential formation damage, has supported a decision to re-drill the entire section and conduct a single testing programme.

Ed Story, President and Chief Executive of SOCO, commented:

"We are particularly excited to return to the TGD structure. Success in the deeper objective section of this structure could totally transform this company and represent a significant milestone in the history of oil exploration in Vietnam. Accordingly, we are quite anxious to resume our evaluation now that we have assembled the proper high pressure drilling equipment.

Vietnam's tourism quickly growing

HCM City earns higher tourism revenue

Ho Chi Minh City’s revenue from tourism reached 15.5 trillion VND (1 billion USD) in the first nine months of the year, up 40 percent compared to the same period last year.

The city received 1.9 million foreign visitors in the period, accounting for about 60 percent of foreign visitors for the year.

Viet Nam is among ten attractive tourism sites for Chinese

Viet Nam is one among the most ten attractive tourism destinations for Chinese travelers, according to the China National Tourism Administration.

Other nine top destinations of Chinese tourists are Hong Kong , Macao , Japan , Thailand , the Republic of Korea (ROK), Russia , the United States , Singapore and Malaysia .

China remains Asia ’s largest source of outbound tourists, Zhu Shanzhong, a tourism promotion official with the China National Tourism Administration told Xinhua news agency.

Nearly 30 million Chinese travelled abroad in the first nine months of the year, up 17 percent as against the same period of last year, according to the administration’s statistics. Last year, about 34 million Chinese people travelled abroad.

Premier Oil CEO declines comment on bid speculation

LONDON (Thomson Financial) - Simon Lockett, chief executive of Premier Oil PLC, declined to comment on persistent takeover speculations targeting the UK oil group, with the latest round naming oil majors Royal Dutch Shell PLC, Australia's Santos Ltd and Italy's Eni SpA as the likely predators.

'We don't comment on market rumours,' Locket told Thomson Financial News.

Analysts consider Premier Oil as an attractive bid target due to its broad exploration portfolio that spans from the North Sea to India, Vietnam and Indonesia.

In October last year, the group confirmed it received a preliminary approach from an unnamed party. Talks, however, were terminated two months later.

Shell, Mexico's Pemex and ONGC Mittal Energy, a joint venture between Oil and Natural Gas Corp and LN Mittal Group, were believed to be among those which were interested in acquiring Premier Oil.

Premier Oil shares today ended up over 6 pct at 1,240 pence.

Thailand’s Nok Air launches Bangkok-Hanoi Vietnam route

Thailand's budget carrier Nok Air on Thursday launched twice-daily flights to Hanoi, its second international destination.

"After three years in service, we have grown to cover all major destinations domestically, and now we are embarking on a new adventure with our latest international destination," chief executive officer Patee Sarasin said.

Its other overseas destination is Bangalore, India.

Nok Air - which is partly owned by Thai Airways International, the national carrier - was set up to offer low-cost flights to popular Thai destinations, such as Chiang Mai, Chiang Rai, Hat Yai, Khon Kaen, Mae Hong Son and Phuket.

The airline is using a 189-seat Boeing 737-800 for its Bangkok-Hanoi route. dpa

Vietnam's state-owned groups treading on each other

Big state-owned corporations and groups are busily reaching their hands out to business fields that are not their fortes.

For example, besides bauxite and aluminum exploitation, the Vietnam Coal and Mineral Group (Vinacomin) has gotten involved in electricity production through the construction of a coal-fueled power plant, the field that belongs to the Electricity of Vietnam (EVN) group.

The Vietnam Oil and Gas Group (PetroVietnam) has also jumped into this area by building a natural gas-fueled power plant. It has also kicked off a five-star hotel, office building project, apart from developing its traditional oil and gas business.

Meanwhile, the Vietnam Shipbuilding Industry Group (Vinashin) and PetroVietnam are reaching their hands out to sea transport business, which is considered the market of the Vietnam Shipping Lines Corporation (Vinalines).

Vinashin recently borrowed money from banks to invest in a beer factory while joining hands with Korean and Japanese partners to design and build ships and establish maritime equipment manufacturing joint ventures.

Big state-owned groups and corporations are not only expanding to the fields of business of small- and medium-size enterprises but to the traditional markets of each other.

They explain that the expansion originates from inner requirements so the diversification of business scope takes place internally and there is no competition between groups and corporations.

However, a senior economist said that it is not as simple as this because this expansion in the form of self-supply can affect the chain connection in the economy.

Former Prime Minister Vo Van Kiet, in a recent article, wrote: "The expansion of economic groups to various fields of business is contrary to the policy 'the state and state-owned businesses will focus on key, essential areas of the economy'. It also disperses the strength and competitiveness of state-owned enterprises and does not help liberate resources held by state-owned enterprises while creates difficulties for the state in controlling those state-owned groups.

"At the same time, these groups hold more market shares, material resources and business opportunities that are precious for the private sector and small- and medium-size enterprises of Vietnam, making these sectors unable to improve their competitiveness and to grow to bring into full play their important roles in the economy," the former Prime Minister writes.

Vice Dean of the Vietnam Economic Institute Tran Dinh Tien also said that although the state doesn't ban economic groups from diversifying their business it is better for them and for the economy if they develop their business based on their available advantages.

"An aviation group must firstly focus on air transport business because its advantage is in air services and it is assigned to develop that market. It should not abuse the strength of a state-owned economic group to conduct securities trading services or grow forests for highest profit," Thien said.

"Even private economic groups in the world don't perform that kind of business because they only grasp opportunities in their fields of business," he added. (TBKTVN)