Tuesday, January 29, 2008

Vietnam's rice exports strong but quality poor

Rice exports in 2007: good business but poor quality

VNECONOMY updated: 28/01/2008

Vietnamese rice has been exported to more than 70 countries and territories around the world including demanding markets such as the EU, the US and Japan. However, behind this impressive figure, the Vietnamese rice exporters are still beset by worries.

In 2007, Vietnam was in the “runner-up” position amongst the world’s rice exporters with the total rice output hitting approximately 36 million tonnes.

In the Summer-Autumn crop alone, localities across the country harvested nearly five tonnes/ hectare, reaching an estimated output of 10 million tonnes, up 430,000 tonnes from the 2006 figure.

According to the Ministry of Industry and Trade, the country exported 4.3 million tonnes of rice in 2007, grossing more than US$1.4 billion in export turnover. Furthermore, the price of Vietnamese rice was sold at an average of US$293/ tonne, US$42/ tonne higher than in 2006.

In early 2008, thanks to winning contracts to export around 4 million tonnes, Vietnam is still the second biggest rice exporters just behind Thailand.

The Ministry of Agriculture and Rural Development said that last year, rice farmers in the Mekong River Delta enjoyed a bumper crop, earning an additional VND2,100 billion at an average price of VND3,000 for one kg of rice.

Rapid development but lacking sustainability

According to scientists, rice output has seen a constant growth over recent years. However, ensuring the sustainability, safety and quality of rice products remains problematic due to post-harvest loss and poor rice quality as a result of long lying in store. The Mekong River Delta Rice Research Institute said that the volume of post-harvest rice lost is still at a high level of 10 percent.

In addition, to meet with market demands, finished rice products must be preserved at a humidity of less than 14 percent, which is applied popularly for long rice in the US, Australia and Thailand. However, Vietnamese rice after being husked, is stored in humidity between 16-17 percent. Therefore, if exported, it must be re-processed to reduce the humidity to 14 percent but this process results in broken rice, reduced quality and low prices.

Prof. Dr. Vo Tong Xuan who has spent many years studying rice in the Mekong River Delta said that Vietnam could win many more rice export contracts after its entry to the World Trade Organisation (WTO). However, its rice must be quality and sold at a competitive price. To compete with big rivals like Thailand, farmers should create close links with businesses and apply advanced cultivation technology.

Rice exports in 2008 will continue to see positive signs as businesses have won contracts to export 4 million tonnes this year but the crux of matter is how to increase the quality of Vietnamese rice to meet the global markets’ tougher demands.

Last but not least there should be closer cooperation among farmers, agricultural managers and businesses, which will enable Vietnamese rice businesses to secure a foothold in the world markets.

News updated

» HCMC earns 830 million USD from exports in January - (25/01/2008)
» Viet Nam wishes to boost trade, investment with Chile - (25/01/2008)
» Vietnam’s goal is US$6bil FDI disbursement in 2008 - (25/01/2008)
» Vietnam tops list of world pepper exporters - (23/01/2008)
» Vinh Long attracts 12 foreign-invested projects - (23/01/2008)
» EU accepts additional 25 seafood processors - (22/01/2008)
» Catfish producers work to improve quality - (22/01/2008)
» Shoemakers target US$4.5bil in exports - (21/01/2008)
» New regulations govern petroleum imports, re-exports - (14/01/2008)
» ADB provides 200 million USD loans for Viet Nam - (11/01/2008)

Saturday, January 26, 2008

Vietnam's Petechim in deal to supply crude to Dung Quat refinery

Singapore (Platts)--25Jan2008
The PetroVietnam Trading Corporation, more commonly known as Petechim,
has signed a contract with state-run PetroVietnam to supply the latter's maiden Dung Quat refinery with 6.5 million mt/year of crude when the plant goes into operation in 2009, the Vietnam News Agency reported January 24.
     The Dung Quat refinery, in the central province of Quang Ngai, will have a nameplate capacity of 6.5 million mt/year (around 130,000 b/d) and will meet 30% of domestic demand.
     The refinery will use local Bach Ho crude for the first five to seven years after which it would use a combination of Bach Ho and Dubai crude in a 85:15 ratio, according to PetroVietnam, which owns 100% of the project.
     The refinery will mainly produce gasoline (41%) and gasoil (40%)
compliant with Euro II emission standards.
     PetroVietnam has also signed preliminary deals with Dutch trader
Trafigura and Swiss-based oil trader Glencore to meet long-term domestic needs for crude oil.
     From being a crude oil exporter, Vietnam is going to turn into a net importer with several refinery projects in the pipeline. 
     PetroVietnam is planning a second refinery project in Nghi Son in the northern province of Thanh Hoa. This plant will have a a nameplate capacity of 7 million-8.4 million mt/year and is targeted to begin operations before 2015.
The refinery will process 100% sour Middle East crude.
     Separately, PetroVietnam is working with Venezuela's PDVSA on a detailed feasibility study for a third refinery project. This refinery, to be located either at Long Son or Ba Ria in the southern province of Vung Tau, is expected to have a nameplate capacity of 10 million mt/year and is also targeted to begin operations by 2015. It will process 100% Venezuelan crude.
--Mriganka Jaipuriyar, mriganka@platts.com

US Helps Vietnam With Direct Flights

By TRAN VAN MINH Associated Press Writer

© 2008 The Associated Press HANOI, Vietnam — Vietnam's national air carrier hopes to have direct flights between Ho Chi Minh City and Los Angeles within a year after the U.S. provided $1.4 million to help upgrade safety standards, an official said Friday.

The money will be used to ensure Vietnam's aviation safety and security procedures meet international standards required for all aircraft entering the United States, according to a statement from the U.S. Embassy in Hanoi.

"The assistance is essential to Vietnam Airlines in its efforts to open direct flights to the United States," said Lai Xuan Thanh, deputy director of the Civil Aviation Administration of Vietnam, or CAAV. "We need more direct flights to match the fine growing economic ties between Vietnam and the United States."

He said the project's three phases are expected to be complete by August. U.S. Federal Aviation Administration will then visit Vietnam to check that all of the standards have been met.

"The United States stands ready to help the CAAV and Vietnam Airlines upgrade its safety capacity and looks forward to the opening of direct service to the United States," the embassy statement said.

Vietnam Airlines could then launch its direct flight to the U.S. in late 2008 at the earliest, he said. It would fly from the southern commercial hub Ho Chi Minh City to Los Angeles via Osaka, Japan.

Currently, United Airlines is the only carrier to operate direct service to the U.S. It opened flight from Ho Chi Minh City to San Francisco via Hong Kong in late 2004.

These flights are considered direct because the planes only stop for a short time to pick up additional passengers.

Vietnam and the United States signed an aviation agreement in 2003, allowing the countries to exchange direct flights and to add code-shared flights, which enables other airlines already operating in each country to complete part of the journey.

More than 1.5 million overseas Vietnamese _ the largest population outside Vietnam _ live in the United States with the biggest community in Southern California. Many fled their native country in boats after the Vietnam War ended in 1975 and northern communist forces took control of the former South Vietnam, which the U.S. had backed.

New research into essential-oil extraction could help locals

Nguyen Thi Hong Ngoc from Quang Nam Province runs a profitable essential oil production business
An award-winning research group from Hanoi has used a method to extract essential oils from indigenous plants that could see locals reaping the benefits.

A group from the Ho Chi Minh City Institute of Chemistry Sciences grabbed headlines last May by successfully extracting essential oil from an Eaglewood tree using a specialized technique.

The “supercritical CO2 method” has been found in the past to slash the amount of time involved in extracting oil as compared to a traditional steam distillation technique.

Further, it opened the door to large-scale production of Eaglewood oil, highly valued on the international market.

The method consists of pumping pressurized or “supercritical” carbon dioxide (SCO2) into a chamber filled with plant matter.

SCO2, a gas with liquid properties, then acts as a solvent, pulling off the compounds responsible for the plant’s characteristic fragrances which are used to make perfume and aromatherapy products.

The SCO2 extraction process occurs in moderate temperatures (around 37 degrees Celsius) and allows the extracts to retain much of their natural fragrance and color.

The steam distillation technique on the other hand, involves high temperatures which can cause the extracts to lose many of their most valuable properties.

Unlike other chemicals used in the steam distillation process, SCO2 is also a non-toxic substance and thus ensures the safety of the final product.

For the last four years, three chemists from the Institute of Industrial Chemistry in Hanoi have also been experimenting with the supercritical CO2 method on an equally valuable source of essential oils.

Their illuminating research earned them first prize at the 2007 Youth Science and Technology Awards, jointly organized by the Vietnam Institute of Science and Technology and the Ho Chi Minh Communist Youth Union.

While the technique has been used for decades by chemists in other countries, the Hanoi researchers decided to apply the method to local vegetation with the ultimate goal of turning a seemingly useless plant into a source of income for local people.

The team conducted experiments on a type of plant called Vetiveria zizanioides L. Nash, or simply vetiver grass.

Widely cultivated in tropical regions around the world, the grass is a major source of essential oils for the aromatherapy and cosmetics industry.

“Vetiver grass is in fact as important as the Aquilaria family, which includes the Eaglewood tree, as a source for producers of perfume and aroma therapy products,” said Le Dang Quang, head of the research group.

Nguyen Mai Cuong, another research member, said that in addition to its valuable essential oil, vetiver grass with its long roots, can also prevent erosion.

Cuong was entrusted with collecting the grass along the Tien Hai coast in the northern province of Thai Binh.

“We chose this grass because we want to enhance its value and to encourage its cultivation for the industry, as well as for an environmental cause – erosion control,” said Cuong.

In the past, local vetiver growers chiefly cultivated the grass as a material to make incense with, since there was no efficient way to extract its essential oils.

“And incense, the making of which involves manual and simple techniques, isn’t a highly valued product on the market,” Quang added.

The two institutes’ projects, Quang said, show Vietnamese chemists’ growing interest in applying global scientific advances to local research.

Reported by Thuy Linh

PetroVietnam targets 23.5 million of equivalent oil this year

Nhan Dan - The National Oil and Gas Group (PetroVietnam) has set a target of producing 23.5 million tonnes of equivalent oil this year, including 16 million tonnes of crude oil and 7.5 billion cubic metres of gas.

The figures were released at a meeting to review the group's activities in 2007 and orientations for 2008 in Hanoi on January 25.

To reach these goals, PetroVietnam will speed up the exploration of new oil fields and bring online as well as speeding up construction of major projects.

After one year of operating under the group model, the Vietnam National Oil and Gas Group (PetroVietnam) reported an all-time high total revenues in 2007 of VND 213.4 trillion (US $13.3 billion), up 18.4% against the previous year and 27% against the targeted figure.

Chu Lai Economic Zone aims to attract $500m in investment

Ha Port in the Chu Lai Open Economic Zone in the central province of Quang Nam. The zone is aiming to attract US$500 million in combined investment capital this year. — VNA/VNS Photo Hong Ky

QUANG NAM — The Chu Lai Open Economic Zone (EZ) aims to attract combined investment capital of US$500 million this year, up 26 per cent from the corresponding period in 2007, head of the zone management board Le Phuoc Thanh said.

"The goal is within reach as four investors to date have registered to pump investment in infrastructure construction and tourism sectors in the zone," Thanh said without revealing the total level of investment capital so far.

During the coming year, top priorities will be given to projects specialising in tourism, services,transport infrastructure such as road and wharves, and construction of industrial zones and free trade areas.

"In order to cope with competition from new coastal economic zones, Chu Lai need to find new measures to attract more strategic investors as well as continue to solve difficulties facing investors in land clearance. Resettling people in areas targeted for development will also be a top priority for us," Thanh said.

The Chu Lai EZ Management Board will restrict the licensing of investment projects by evaluating plans yet to be implemented and considering licence revocations. The board will also be more discriminatory when handing out licences and allocating land.

As many as 21 investment projects, together worth roughly $962.3 million, were registered in the zone last year. Six of the 14 licensed were involved in the tourism sector while the rest were concentrated on industry.

"There is great potential for developing tourism in the EZ because of its coastal location, beautiful surroundings and large land fund for construction," the board said.

Among these licensed projects, four are already operational.

The latest additions bring the total number of registered projects in the zone to 51, with capital totalling over $1.49 billion. Among these 44 have been granted licences amounting to $704 million. — VNS

Foreigners Interested In Vietnam's Investment Market

HANOI, Jan 26 (Bernama) -- Representatives of many international organisations and businesses have expressed their keen interest in Vietnam and continued to consider the nation an attractive investment market, VNA quoted the Vietnam Investment Review newspaper's special issue as saying.

The special issue reviewed foreign investment activities in Vietnam for the past 20 years.

Both Executive Director of the American Chamber of Commerce (AmCham) in Hanoi Adam Sitkoff and Chief Representative of the Hanoi-based Japan External Trade Organisation (JETRO) Kenjiro Ishiwata said that their member businesses are paying special importance to Vietnam.

"Vietnam's strategic position in the region has brought Japanese investors in," said JETRO Chief Representative.

Meanwhile, AmCham Director Sitkoff said that many US businesses consider Vietnam the world's most attractive emerging market.

World Bank Country Director Ajay Chhibber also admitted that more and more foreign companies consider Viet Nam an attractive investment destination in the region for its low cost, active reform and socio-political stability.

As a result, the annual foreign direct investment (FDI) influx in Viet Nam compared with its gross domestic product (GDP) is always high in Southeast Asia, he said.

Sharing the same opinion, General Director of the Korea Trade and Investment Promotion Agency in Hanoi Kim Won Ho said that Vietnam has surpassed China to become an attractive investment destination for his country's investors.

Vietnam's admission to the World Trade Organisation (WTO) and the ASEAN-RoK free trade agreement which became effective in June 2007 have helped Vietnam become an extremely important market" and our current top priority is to promote investment in Viet Nam, he affirmed.

These officials and executives also praised the Vietnamese Government for its efforts in implementing business and investment environment reform.

"Vietnam could not have become a favourite destination for FDI unless the nation made its pledge for business environment improvement and FDI promotion," WB Country Director Chhibber said.

"Forty percent of FDI businesses in Vietnam are wholly foreign-invested enterprises, 37 percent are joint ventures and the remaining are business cooperation contracts," he noted.

AmCham Director Sitkoff said that Vietnam's implementation of measures to improve its business and investment environment and its amendments and supplements to its legal documents have contributed to protecting the country's regulations and mechanisms and making them in line with the global standards.

"These laws have laid a favourable foundation for business and investment activities and helped promote Viet Nam 's socio-economic development," he elaborated.

However, they also pointed out the nation's shortcomings in attracting FDI such as poor infrastructural facilities, lacking high skilled human resource and a strong subsidiary industry.

In order to maintain a sustainable growth rate, Director of the Asian Development Bank in Vietnam Ayumi Konishi suggested Vietnam further improve its investment environment, continue to finalise its macro-economic policy mechanism, conduct structural reform and invest in skilled human resources.

He took the occasion to affirm that "ADB has been actively support Viet Nam in development process and committed to form a good investment environment in all over Asia ."

The WB Country Director said that Vietnam's implementation of its commitment in the WTO is a key factor for the nation to maintain its position as an attractive destination for FDI.


Friday, January 25, 2008

Vietnam to spend $100 million a year in oil search abroad

HANOI, Jan 25 (Reuters) - State oil group Petrovietnam said on Friday it would invest $100 million annually in the next several years to prospect for oil and gas in other countries to boost its oil reserves.

The Hanoi-based group said in a statement it aimed to add between 30 million to 40 million tonnes of oil equivalent to its total oil reserves annually, to "guarantee national energy security".

This year, the group said it aimed to purchase two major oil fields in Kazakhstan and Azerbaijan.

Petrovietnam's exploration arm PVEP said it had acquired assets, most of which were under exploration, in Algeria, Malaysia, Indonesia, Iraq, Mongolia, Venezuela and Madagascar.

Vietnam now ranks as Southeast Asia's third-largest crude oil producer after Indonesia and Malaysia, with 2008 oil production forecast at about 320,000 bpd, all for export as it lacks refineries.

The country's first oil refinery, the 140,000-bpd Dung Quat plant, is scheduled to go onstream in February 2009.

(Reporting by Nguyen Nhat Lam; Editing by Valerie Lee)

Thursday, January 24, 2008

Vietnam's oil production slumps for third year in 2007

The state-run oil and gas group, PetroVietnam, reported lower output for the third straight year with 15.91 million metric tons of crude oil produced in 2007.

PetroVietnam has previously reported output of 17.3 million tons in 2006.

The output figure for 2007 included more than 100,000 tons from a partly-owned Malaysian field, Tran Ngoc Canh, General Director of PetroVietnam said Monday.

An engineer at a Vietsovpetro oil drilling platform, a joint venture between PetroVietnam and Russia’s OAO Zarubezhneft

The 2007 production equates to about 327,000 barrels per day, based on conversion ratios previously given by the oil producer.

“Production at Bach Ho is falling because the field is getting old,’’ said Canh.

PetroVietnam forecast crude oil production this year at 16 million tons, without specifying how much may come from fields outside Vietnam.

In addition to Malaysia, PetroVietnam also has stakes in exploration, or production ventures, in countries including Algeria and Indonesia.

The oil group’s overall sales rose 18 percent to VND213.4 trillion ($13.35 billion), according to the company, which did not give a reason for the increase.

Source: Bloomberg

Vietnam attracts 9,500 foreign invested projects

Nhon Trach 1 Industrial Zone in southern Dong Nai province.

Nhan Dan – The Foreign Investment Law was issued on December 29, 1987. It was one of the first laws issued during the renovation period. The promulgation of the Foreign Investment Law has institutionalised the Party and State’s policies in effectively attracting foreign investment capital. It is regarded by the international community to be a transparent, attractive code and basically conforms with the international norms. Within the context of fierce competition in attracting foreign investment regionally and globally, the Foreign Investment Law in Vietnam has been a vital lever in attracting foreign investment to Vietnam.

Since the promulgation of the Foreign Investment Law in 1987, the law has been amended four times in 1990, 1992, 1996 and 2000. The issuance of the law as well as of other legal documents relating to foreign investment has created a legal environment for foreign investment activities in Vietnam.

Thus, though the market mechanism in Vietnam has yet to be perfected, foreign investors in Vietnam can still carry out their investment activities in Vietnam without any big differences compared to other countries.

Importance has not only been attached to perfecting legal environment, during the past 20 years, the business and investment environment and the decentralised administration of foreign investment have received due attention. These efforts have contributed to the encouraging foreign investment activities in Vietnam, affirming the significant position of the foreign-invested sector in national industrialisation and modernisation.

By the end of 2007, Vietnam has attracted over 9,500 FDI projects with a total registered capital of US $98 billion, including additional registered capital.

Excluding expired projects and those that have been dissolved ahead of duration, currently 8,590 projects are still valid with a total registered capital of US $83.1 billion. Total registered capital experiences a trend of increasing from 2003 to date.

In 2003, total registered capital increased by six times compared to 2002. In 2004, the figure was up 42.9% compared to 2003; it was 58% in 2005; 75% in 2006 and 69% in 2007.

From 2001 to 2005, Vietnam attracted a total of US $20.8 billion, up 73% against the targeted figure set at the Resolution 09/2001/NQ-CP.

In 2006 and 2007, foreign investment flow to Vietnam increased remarkably with the registry of many large-scale projects in heavy industry and services.

Foreign investment to heavy industry and construction occupies the biggest proportion, accounting for 66.8% of the total number of projects, 60.2% of the total registered capital and 68.5% of the total implemented capital.

From 1988 to the end of 2007, northern localities attracted 2,220 FDI projects with a total registered capital of US $24 billion, accounting for 26% of the project quantity, 19% of registered capital and 24% of the total implemented capital.

Specifically, Hanoi has attracted half of the total registered investment and implemented capital of the whole northern region, followed by Haiphong, Hai Duong and Quang Ninh.

Southern localities from Ninh Thuan southwards have attracted 5,452 projects with total registered capital of US $46.8 billion and total implemented capital of US $15.7 billion, equivalent to 48% of the total number of projects, 56% of registered capital and 51% of implemented capital.

Foreign investment in the Mekong river delta region was the lowest in the country, accounting for only 3.6% of the total number of FDI projects to the country, 4.4% of total registered capital and 3.2% of total implemented capital.

Quang Nam, Da Nang and Phu Yen are currently topping the localities in the central region in terms of foreign investment attraction, though their rate of attraction is still low compared to their potential.

To date, 80 countries and territories have been investing in Vietnam. As many as 68% of these are from Asia; 16.2% from the EU and 11% from America.

The foreign-invested sector is underlining its significance in Vietnam’s economy and is the sector enjoying the most dynamic growth.

Vietnam’s investment and business environment is improving, thus the country is becoming more attractive to both foreign and domestic investors.

Vietnam firms to build $10 million Internet data center

Vietnam to build biggest Internet data center

HANOI, Jan. 24 (Xinhua) -- A Vietnamese information technology company and a U.S.-invested firm have agreed to invest dozens of million U.S. dollars in developing Vietnam's biggest Internet data center by September and two other centers by 2010, a corporate official said Thursday.

The local company named Quang Trung Software City (QTSC) in southern Ho Chi Minh City and U.S.-invested firm called DOT Vietnam will jointly invest around 10 million dollars in building the 1,000-square meter center which will, once becoming operational in September, offer hosting and backup services to such major clients as government agencies, multinationals, financial groups and banks, said QTSC's chief executive officer Chu Tien Dung.

QTSC, specializing in software production, and provision of facilities and services to software developers in an area of 430,000 square meters in the city, and DOT Vietnam plan to pour around45 million dollars into building two other Internet data centers in Vietnam by 2010, he said.

Vietnam had roughly 18.6 million Internet users, or more than 22 percent of its total population by the end of 2007, up from nearly 14.7 million users by the end of 2006, the Vietnam Internet Network Information Center under the Ministry of Information and Communications told Xinhua on Thursday.

Of the 18.6 million Internet users, over 5.2 million are subscribers, including roughly 1.3 million broadband ones, it said, noting that the country had total international bandwidth of 12,115 Mbps, and 60,604 websites using Vietnamese domain ".vn" by the end 2007.

Vietnam has posted an average annual growth of 36 percent in Internet users since its connection to the global computer network in November 1997. Under the ministry's plan, all ministries, sectors and state administrative agencies at district level upward, institutes, universities, colleges and senior high schools will have broadband Internet connections by 2010.

Vietnam increases investment abroad

Nhan Dan – Vietnam has taken the initiative in increasing its investment abroad. During the past 20 years, Vietnamese enterprises have invested a total of US $1.39 billion in 249 projects abroad. Hai Thu has more.

Vietnamese enterprises have invested in projects in 35 countries and territories. Laos tops the list in terms of attracting investment from Vietnam. Specifically, Vietnamese businesses have invested in 86 projects in Laos with a total investment capital of nearly US $584 million, accounting for 34.5% of the total number of projects and 42% of the total investment capital.

Cambodia ranks second, attracting 27 projects from Vietnamese investors with total investment capital of US $88.4 million, followed by Russia, 12 projects and US $48 million.

There are also big investment projects in oil and gas exploration and exploitation in Algeria, Iraq and Madagascar.

In 2007 alone, a project to explore and exploit oil and gas in Madagascar was licensed with a total investment capital of US $117.36 million.

As many as 40.2% of the invested projects abroad and 64.2% of the total investment capital has been invested in industrial sector. Vietnamese investors have also paid attention to investing in agricultural sector (accounting for 21% of the projects and 20.5% of investment capital) and services (39.6% of projects and 5.5% of total investment capital).

Initially, some projects have been carried out quite effectively. For example, by investing US $30 million in two projects to explore and exploit oil and gas by the National Oil and Gas Group, PetroVietnam, in Algeria and Malaysia, PetroVietnam have announced they have found oil at both sites. Rubber plantation projects in four provinces in southern region of Laos by the Vietnam Rubber Corporation and Dak Lak Rubber Company with a total investment capital of US $60 million have also been deployed effectively.

Vietnam has built a legal foundation regarding investments by Vietnamese enterprises abroad, including a Resolution by the government promulgated in 1999, a protocol by the Ministry of Planning and Investment on guidelines for investment abroad by Vietnamese enterprises and a protocol by the State Bank of Vietnam on foreign currency management towards investment abroad. However, during implementation, weaknesses have been become apparent.

The Investment Law promulgated in 2005 has overcome these weaknesses. In addition, the Resolution 78/2006/ND-CP has also created more favourable conditions for domestic investors in their investment abroad.

According to forecast by the Ministry of Planning and Investment, in the 2006-2010 period, Vietnamese investors will invest a total of US $1 billion abroad. Many projects invested abroad by Vietnamese businesses are in the process of negotiations. These projects are in sectors such as oil and gas in South-East Asia; electricity in Laos and China; mineral exploitation in Laos; communications in Laos, Cambodia, Hong Kong, Singapore, the US; transport in Singapore, Hong Kong and Russia and import and export and retailing in the US, EU, Japan and China.

This has proved that investing abroad has become a new trend for many domestic businesses.


Vietnam's Petechim, refinery sign oil supply contract

The PetroVietnam Trading Corporation (Petechim), on January 23, signed a contract to provide the Dung Quat Oil Refinery with 6.5 million tonnes of crude oil a year when the country’s first refinery goes into operation in 2009.

Petechim – the newly-relaunched subsidiary of the Viet Nam Oil and Gas Group (PetroVietnam) – also reached a deal with Zarubezneft under which the Russian company will supply it with equipment.

Also on January 23, Petechim inaugurated its two new subsidiaries, namely Petechim Oil Trading, engaging in oil and gas import-export and trade, and Petechim Servimex, specialising in equipment and technical service import and export.

The name of Petechim is associated with Viet Nam ’s crude oil export operation since 1987. It has so far exported 215 million tonnes of crude oil, earning a revenue of more than 54 billion USD. (VNA)

Viet Nam to become energy importer by 2015

Viet Nam will become an energy importer by 2015 instead of being an exporter as at present, said a Japanese expert at a seminar on the nation’s energy master diagram held in Ha Noi on Jan. 23.

“Although Viet Nam has taken measures to effectively use its energy sources, its fossil sources are running out and the nation’s consumption demand will rise by 4.3 times in the next two decades,” K. Kanekiyo, head of the Japan International Cooperation Agency (JICA)’s researchers group on Viet Nam ’s master diagram, elaborated.

He went on to say that coal, oil and gas will be the nation’s major import energy products.

Experts also warned that Viet Nam ’s per-capita electricity consumption against GDP is much higher than that of other regional countries, i.e. Thailand , and nations with the same income level.

To meet the nation’s increasing energy consumption demand, experts suggested the nation have a master plan to conserve, develop and logically utilise gas, crude oil, coal, recycled energy.

The development of an effective and transparent energy market operating in accordance with economic principles in which energy prices are equal to international prices will help make every individual and business to use energy more economically, they noted.

Vietnam eyes oil production in Azerbaijan

The FINANCIAL -- According to APA-Economics, the Vietnam’s National Oil and Gas Corporation (PetroVietnam) takes great interest in oil projects in Azerbaijan.

“The Corporation is taking bidding procedures to acquire an oil well in Azerbaijan and if wins the contract, tapping oil will commence this year,” PetroVietnam General Director Tran Ngoc Canh told a media briefing.

He added that negotiations are under way.

PetroVietnam has so far signed 13 overseas exploration and exploitation projects. PetroVietnam pumped almost 22.7 million tonnes of oil in 2007, 100,000 tonnes of which were tapped in foreign countries. It also exported more than 15.7 million tonnes of oil for $8.8 billion.

Vietnam's Corporate News

HCMC - ACE Life Insurance Co., Ltd. announced yesterday 320% growth in new premiums for 2007 against the previous year. It also announced the interest rate on the cash value for Universal Life products effective from January 1, 2008 at 6.8% per year. The company also has plans to introduce a new variant of the Universal Life product in early 2008 to meet the requirements of special segments of the population.

HCMC - Saigon Thuong Tin Commercial Bank (Sacombank) has opened a new branch at 130-130A-132 Bach Dang Street in the central coast city of Danang. It now has 18 branches and 48 transaction offices in provinces from Quang Binh southward to Ba Ria-Vung Tau, Dau Tu reports.

HANOI - Vietnam Insurance Corp. (Bao Viet) yesterday made its debut as a financial and insurance group, with its operations covering life and non-life insurance, securities investment and banking among others. It has now also officially become a holding firm, owing Bao Viet Vietnam, Bao Viet Life and Bao Viet Fund Management Co., Dau Tu reports.

KHANH HOA - South Korea’s STX VINA has got an investment certificate from the authorities of Van Phong Economic Zone in the central Khanh Hoa Province. The firm will invest US$500 million in a project building oil, container and cargo ships. It is expected to employ 20,000 people, Thanh Nien reports.

QUANG NGAI - Lilama Electrical-Mechanical-Environmental Joint-Stock Co. has decided to invest VND152 billion in an environment project in Dung Quat Economic Zone in the central Quang Ngai Province. It will buy transport means and equipment to treat industrial, household and toxic waste, including from hospitals, Dau Tu reports.

HANOI - Vietnam Technological and Commercial (Techcombank) has reported pre-tax earnings of VND709 billion last year, an increase of 131% on the previous year. Its total assets had doubled to almost VND40 trillion as of the end of last year.

HANOI - Bellavita, the distributor of children products in Vietnam for the Italy-based Artsana, has opened a showroom at the Syrena Tower at 51 Xuan Dieu Street in Hanoi. This is its second showroom, Dau Tu reports.

BINH DUONG - Stada-VN, a Vietnamese-German joint venture, has inaugurated a factory that produces pharmaceutical products under the GMP EU standard in the Vietnam-Singapore Industrial Park in HCMC’s neighboring province of Binh Duong, Thanh Nien reports.

Vietnam welcomes 1,900 person cruise ship

High-end cruise liner docked in southern coast
The Rhapsody liner with some 1,900 people on board berthed Monday at Phu My Port in Ba Ria-Vung Tau Province on the southern coast.

The liner, which can hold up to 2,500 people, belongs to US-based Royal Caribbean International.

Royal Caribbean International has chosen Hanoi Toserco, a domestic travel company, as a partner to introduce cruise travel to local Vietnamese.

The agency arranged for representatives from some 30 domestic travel agencies to visit the Rhapsody during its brief dock.

The ship left Phu My Port Monday evening for Thailand, and then heads to Hong Kong, Shanghai, and the Republic of Korea before returning to Vietnam next month.

Reported by Mai Vong

Vietnam to build chess institute in south

Chess institute to be built in south
11:12' 24/01/2008 (GMT+7)

Minister Nguyen Danh Thai

VietNamNet Bridge – FIDE wants to build an international chess institute in the southern city of Vung Tau, in Ba Ria – Vung Tau province, said FIDE Secretary General Ignatius Leons.

In a meeting with Deputy Minister of Culture, Sports and Tourism cum Head of the General Department of Sports and Physical Training Nguyen Danh Thai on January 22, the FIDE Secretary General said the total capital needed to build the institute is around US$1 million and FIDE plans to kick off construction after the end of the World Young Chess Tournament held in Vietnam in late 2008.

He said that the People’s Committee of Ba Ria – Vung Tau province has agreed to allocate 5,000sq.m and he hopes that the institute will train many young chess talents, not only for Vietnam but also the rest of the world.

The stunning cherry blossoms of Vietnam's Vung Tau, Long Hai

Visitors admire the blooming cherry trees in the southern beach city of Vung Tau
When I moved to Vung Tau from the north, I came to be by the sea in a peaceful and clean city.

But I got more than I expected when I saw the numerous cherry blossoms gracing the city’s landscape.

In the north, the peach blossoms are now in bloom, a signal to the people of the region that the Tet Lunar New Year is approaching.

While I was looking for those same peach blossoms, I was pleasantly surprised by the flowering cherry trees of Vung Tau.

None of the local residents I met could tell me when the cherry trees had been planted.

They must have been there for decades.


1. Buses to Vung Tau are available at Ben Xe Mien Dong (East Bus Station) every 15 minutes from 5 a.m. to 7 p.m.
Try Rang Dong, Mai Linh or Thien Phu bus lines.
Cost: VND45,000 per person.
2. Mai Linh offers transit taxi for passengers to Vung Tau.
3. The Express Hydrofoil is available at Bach Dang Wharf for VND120,000 per person.
4. Hotels, bikes and motorbikes are available for rent in both Vung Tau and Long Hai.

Each year, the cherry blossom season falls near Tet and lasts for almost a month.

Cherry blossoms in Vung Tau differ from those in Japan in shape, but they have the same lovely pink and white col-ors and deliver the fresh feelings of spring.

Along Tran Phu Street, close to Nghinh Phong Cape, little pink buds appear on cherry trees being bent by the ceaseless winds coming from the sea.

For the most poetic scenes of cherry blossoms, wander along the roads near Nui Lon (Big Mountain) and Nui Nho (Small Mountain), the two mountains of Vung Tau.

For the most densely populated area of cherry trees in full bloom, head about 25 kilometers out of Vung Tau to Long Hai.

In Long Hai there is a newly constructed road connecting Vung Tau with Phan Thiet.

This is no doubt one of the most stunning roads of Vietnam, with the sea and beautiful beaches on one side and pines, mountains, and abundant cherry blossoms on the other.

As this road is newly constructed, it is in very good condition and suit-able for all methods of road trans-port, such as bicycles, motorbikes, cars and ox-drawn carriages.

Reported by Thu Giang

Wednesday, January 23, 2008

Vietnam's Vinh Long province attracts 12 foreign-invested projects

VINH LONG — The southern province of Vinh Long to date has attracted 12 foreign direct investments (FDI) with a total capital of US$63.6 million, including five FDI projects inside the industrial zone and seven FDI projects on the outside.

In 2007, Vinh Long Province granted two new licences to Taiwan’s Bo Hsing Ltd Co and South Korea’s CJ Vina Agri Ltd Co with a total capital of $9.1 million.

Currently, eight FDI firms are operational and the remainders are being built and fitting equipment. — VNS

Vietnam entrepreneurs meet up in Russia

MOSCOW — The Association of Vietnamese Entrepreneurs in Russia (VINAENTRASSCO) held its fifth congress in Moscow last Saturday.

Delegates worked out a plan for the coming period, aimed at consolidating Vietnamese entrepreneurs in Russia, boosting the economy, tourism, and investment co-operation between Viet Nam and Russia. The association also aims to support Vietnamese entrepreneurs’ legal interests in the Russian market, encourage its members to abide by the country’s laws and increase investment in both Viet Nam and Russia.

Vietnam oil and gas services provider moves south

Oil and gas services provider moves south

BA RIA-VUNG TAU — Specialised oil and gas industry services provider PTSC Offshore Services Co. Ltd. was formally established in the southern province of Ba Ria-Vung Tau yesterday.

This affiliate of the Petroleum Technical Services Corporation, which actually began operations five months ago, has a charter capital of VND25 billion (US$1.56 million), and will provide installation, operational, and maintenance services and supply technical workers for petroleum-related projects.

Monday, January 21, 2008

Vietnam PTSC sees 2008 gross profit up 15.4 pct

Mon Jan 21, 2008 2:27am EST

HANOI, Jan 21 (Reuters) - Petroleum Technical Services Corp PVS.HN (PTSC), the third-largest firm on the Hanoi exchange, said on Monday it expected a 15.4 percent rise in gross profit to 300 billion dong ($18.6 million) this year.

The subsidiary of state oil group Petrovietnam, in a a statement on its Web site (www.ptsc.com.vn), also forecast revenues would rise 7.3 percent to 6.5 trillion dong this year.

The Ho Chi Minh City-based firm did not give a net profit forecast or comparative figures for 2006.

Shares in PTSC fell 3.28 percent to 94,400 dong on Monday, valuing the firm at $596 million.

It is the third-largest listed firm on the Hanoi exchange after Asia Commercial Bank ACB.HN and Kinh Bac City Development Share Holding Corp KBC.HN.

PTSC offers engineering services for oil and gas exploration, logistics and port services for other oil firms operating in Vietnam.

It owns 20 vessels, including a floating production, storage and offloading vessel. Crude is Vietnam's largest export earner, bringing a record $8.5 billion last year, 2.6 percent higher than 2006 due to high oil prices, according to government data.

The company said last month it had signed a contract to provide maintenance services to the $2.5-billion Dung Quat refinery, scheduled to start operations in the first quarter of 2009. ($1=16,105 dong) (Reporting by Ho Binh Minh; Editing by Darren Schuettler)

Aussie company secures Vietnam’s Defence

Business21 January 2008 02:18PM
By Lilia Guan

Network security vendor, Senetas has signed a non-binding memorandum of understanding (MOU) with Vietnam Information Security Laboratories (VISL), an agency of Vietnam’s Ministry of Defence, to distribute Senetas CypherNet high speed network encryption products.

Australian-based Senetas designs and manufactures enterprise network security devices, including Layer 2 hardware encryption devices to guarantee data security. The Senetas CypherNet Encryption Security Platform provides a range of secure data encryption products.

Agreement for the partnership was reached following a recent meeting in Hanoi between Senetas CEO John DuBois and Major General Dr Nguyen Quang Bac, Director-General of the Vietnamese Defence Ministry’s Centre for Military Science and Technology.

General Nguyen said Vietnam wanted access to encryption technology for both classic and quantum cryptography.

Acting as a distributor for Senetas technology, the Ministry’s VISL would oversee security arrangements for other government agencies and would re-sell CypherNet to commercial enterprises, initially in banking and finance sectors.

Under the terms of the MOU, Senetas will partner with VISL to provide training, support, implementation, marketing programs and technology transfer for information security products and services for VISL and its customers.

Senetas will also provide, on a fee for service basis, engineering support and development services to VISL engineers on key projects nominated by VISL. Future research and development collaboration could include a purpose-built encryption platform for the Vietnamese Defence Ministry.

Senetas CEO John DuBois said Senetas would assist VISL to establish its own ‘Common Criteria & FIPS’ certification program in Vietnam by providing initial information and training in Australia followed by on-site training in Vietnam. It will also introduce VISL to relevant Australian government and international accredited testing agencies.

Dubois said the appointment of VISL as its reseller for Vietnam, realised Senetas’ goal to ensure it was represented in emerging market economies.

“Since Vietnam embraced its "Doi Moi" economic reform program in 1986 it has enjoyed consistent growth and with its membership of the World Trade Organisation in November 2006, Vietnam is well positioned to become a significant economy in this region,” he said.

Vietnam has traditionally been an agricultural exporter (fisheries products, tea, coffee, cashew nuts, pepper and it is the world’s second largest rice exporter), but other non-agricultural sectors of the economy have increased, including heavy industry and labour-intensive manufactured goods such as clothing and mining.

Over the past two years its economy has grown at more than 8 percent with one of the region’s lowest unemployment rates.

Vietnam Airlines finds over a ton of snakes on flight

Vietnam Airlines Find Snakes on a Plane

Vietnam Airlines found over a ton of ratsnakes on a flight from Bangkok. This will be the second time snakes were found in Vietnamese air cargo.

Ratsnakes, Ptyas Mucosus, are a protected species.

The snakes were found in over 60 boxes that came to Noi Bai in Hanoi on Thursday.

A reported 1,550 pounds of snakes were seized by Thai Airways during a flight to Hanoi last month.

Vietnam, China continue talks on Tonkin gulf

The Vietnam-China joint working group on the delineation of the sea area off Bac Bo (Tonkin) Gulf held its fourth round of talks in Beijing from January 17-18.

The two sides exchanged views and reached consensus on a number of issues, creating a basis for further negotiations to define sea territories between the two countries.

Officials of the two countries agreed that the fifth round of talks would be held in Vietnam later this year.

New Austrian fire trucks for Vietnam




The New Year is only a few weeks old but Rickmers-Linie, the Hamburg based specialist for breakbulk, heavylift and project cargoes, has already shipped an extraordinary consignment: 26 pieces, every one red and identical in every respect. This cargo was loaded onto the Pearl String vessel, Rickmers Seoul, at the beginning of January 2008.

This ‘red cargo’ consisted of 26 fire trucks that Austrian manufacturer Rosenbauer is shipping to Vietnam where they will be used at different fire brigade stations across the country. The 26 trucks are 7.60m long and weigh eight tons each. They are scheduled to arrive in Haiphong on 5 February 2008.

The booking of this cargo was carried out by the German forwarding agent deugro (Deutschland) Projekt GmbH, Stuttgart. The trucks were driven to the DP World Breakbulk Terminal at the Churchill Dock in Antwerp, where they were loaded onto the ocean vessel.

Coincidentally, Rickmers Seoul was the first Rickmers-Linie’s “Round-the-World Pearl String Service” vessel to be handled in Antwerp by DP World Breakbulk since Rickmers-Line joined DP World Antwerp and Conti-Lines as a shareholder in the terminal on 1 January 2008.

For more information, contact:

Rickmers-Linie GmbH & CIE. KG (Head Office)
Neumühlen 19
Hamburg 22763
Phone: +49 40-38 91 77-200
Fax: +49 40-38 91 77-274

Sunday, January 20, 2008

The Pearl of Asia: Vietnam needs scrap material to fuel its surge toward industrial development

Vietnam’s economy is no longer just about agriculture. The country is benefiting from macroeconomic momentum in industrialization and investment in the East Asia/Southeast Asia (SEA) region and globally, which has put it on the road to being a developed nation by 2020.

However, when it comes to exporting scrap materials to the nation of Vietnam, scrap companies are both new and late-comers to the county’s emerging need for scrap material.

Vietnam is a future industrial platform, being rich in metals history and in actual mineral deposits. However, most of these metals are being reprocessed for use outside of the country.


Vietnam’s government operates on a one-party system that is centrally planned. The 12th largest country (by population) in the world, Vietnam has adopted opportunity capitalism as its industrialization and development tool. The country, which is second only to China in GNP growth in East Asia, is characterized by three main industrial regions: Hanoi/Hai Phong (north), Danang (central) and Ho Chi Minh City (south). Vietnam must export its resources to survive and needs value-added inputs to advance.

To advance industrialization and exports, Vietnam recently announced the merger of its Trade and Industry ministries. According to news reports, the Vietnamese government hopes that by combining these ministries, it will be able to streamline the management of many industrial sectors. Korea, Japan and Taiwan have all invested in Vietnam’s industrialization, and so can North American scrap dealers.

However, scrap dealers should be aware that Vietnam’s Ministry of Natural Resources and Environment (MONRE) has much to say about 20 established categories of scrap, and this serves as the country’s scrap standards for now and directly affect shipbreaking initiatives undertaken in the country.

Vietnam’s emerging scrap demand is related to its surge toward industrial development. Vietnam plans to increase industrialization in the country by 20 percent, which will contribute 60 percent to its GDP. This means a drive to produce $4 billion per month in industrial goods. Steel production in Vietnam increased this year, but still cannot meet the country’s construction, infrastructure and other metals needs. However, imports of steel from China have emerged as a problem in Vietnam, as it is effectively holding back steel production development in the country, while local steel prices are rising as well.


As already stated, Vietnam is rich in mineral resources, possessing some 60 kinds, making it the seventh ranking country in the top 15 of basic resource countries. Among the minerals Vietnam has are copper, bauxite, zinc, titanium and iron. The Ha Tinh/Thach Khe mine in the north of Vietnam has 1.2 billion tons of iron, of which 300 million tons–the largest amount in SEA–is useful. A $230 million joint-venture operation between Canada and Vietnam was recently announced in the Tai Nguyen province of Vietnam.

Further, the industrial parks of Vietnam are the backbone of its industrialization and its move beyond agriculture. The country has more than 71 operational industrial parks, with 53 currently in development. These industrial parks, backed by allied seaport development, will form two corridors in Vietnam–the existing Vietnam Route 1 and the emerging Ho Chi Minh Highway (HCMH).

However, one should be aware that industrialization in Vietnam currently is dependent on a local partner, wherein a U.S. scrap exporter will need a trusted contact on the ground to develop the country’s scrap import potential in the near term. Vietnam has a history of stand-in trading companies of all sizes and skills which present the real buyers.


Capital markets are fueling the momentum of Vietnam’s industrialization and investment, but it is still a country with many small and medium enterprises (SMEs). Nearly 70 foreign investment funds are looking to begin operations in Vietnam in the near term; but, it is major foreign and state enterprises that will influence the potential demand for American scrap.

It wasn’t Vietnam joining the World Trade Organization in January of 2007 that pushed Vietnam as an emerging investment hub as much as it was the Normal Permanent Trade Relations (NPTR) action by the United States in December of 2006. The NPTR coupled with the earlier U.S.-Vietnam Bilateral Trade Agreement (BTA) in December of 2001 has propelled Vietnam as a U.S. exporter and producer and has attracted industrial, minerals and mining investments. In the period 2001-2006, Vietnam’s exports to the U.S. increased by eight times, while U.S. exports to Vietnam increased by two times. Also, mutual visits by President Bush to Vietnam in late 2006 and the recent visit of Vietnam’s President Triet to the United States in June of 2007 have firmed the potential of the strategic partnership, which drives foreign development interests in Vietnam along with the country’s growth.

Major foreign minerals, metals and paper interests that use scrap commodities are already present in Vietnam. State-owned enterprises (SOEs) now populate and dominate the ferrous side of the scrap sales equation. But, privatization, similar to that taking place in Eastern Europe, is on the near horizon. American scrap exporters should address this change in Vietnam and build relationships for the future through representative sales now.

Thus, Vietnam is an emerging scrap market with major foreign and U.S. investment firms focusing on investment and development project deals there. This means that Vietnam has access to the funds needed to industrialize as well as the push to do so in the near term, which in turn could mean a full range of scrap commodity sales soon; but, locally controlled procurement is the Holy Grail.

The European scrap export community already knows about the potential of scrap sales in Vietnam, with firms such as ArcelorMittal, based in India, having direct representation on the ground; Alcoa will be present in future bauxite mining. Additionally, the American scrap recycling industry has a major role to play, particularly in ferrous scrap sales for the Vietnam steel industry, which is growing exponentially as foreign investors are eyeing huge steel projects throughout Vietnam.

The country is hot on metals and minerals, with paper in pursuit. It has established trade associations for commodities like steel, plastic and paper. However, it does not yet have an organized scrap industry association.

Recyclers should approach the current unorganized Vietnamese scrap industry with the knowledge that everyone there is in the business of trading. Also, knowing that Vietnam has a cultural history of conflict, one should keep in mind that building relationships take time.



Vietnam’s capacity to refine steel ingot for the production of steel was estimated to reach 875,000 tons in 2006. Yet the country as a whole imported some 2.5 million tons of steel ingot throughout the year. Vietnam’s policy is to increase steelmaking capacity. The country has three major plant locations: Hanoi (Thai Nguyen and Hung Yen provinces), Hai Phong City and the HCMC areas. One half of the steel plants are in the HCMC area, with major new developments in nearby Vung Tau, at the South China Sea. For example, in Vung Tau, POSCO/Korea built a $361 million plant last fall, and Vietnam Steel Corp. and India’s TATA (Phu MY) and SMC are also looking to build in Vietnam, as is Taiwan’s E-United Group.


Vietnam Minerals Corp. (VIMICO) started work a year ago on a bauxite complex for export in Lam Dong in central Vietnam that will be capable of producing 600,000 tons per year when it becomes operational in 2009. This venture is based on a reserve of 225 million cubic meters, focused probably for export to Japan. Alcoa is in Dak Nong Province (central Vietnam), and Japanese companies are in Vung Tau (south Vietnam). Asia Packaging operates a can factory in Binh Duong Province (in the south). Additionally, United Company Rusal has announced a representative office in Vietnam.

US$ 1.3 billion tourism park project licenced

Good Choice USA-Vietnam Ltd.Co has been recently approved by the Ba Ria- Vung Tau People’s Committee to carry out construction of a tourism park worth nearly US$ 1.3 billion.

The park under the theme “Vung Tau Wonderful World Theme Park” will be constructed on an area of 155ha in Bau Trung, Vung Tau city.

“This is the biggest foreign-invested tourism project in the province," said Mr Mai Ngoc Thuan, vice director of the province’s Planning and Investment Department.

Aside from the recreation, shopping, exhibition areas, the park will include one five-star hotel of 2,500 rooms and four compounds of five-star hotels with 4,000 rooms.

The total capital of US$ 1.299 billion for the project will be added to the initial US$ 466 million as following: US% 16 million within 60 days after the approval day and the remaining US$ 450 million in the following 10 months. (Saigon Times)

Vietnam-Laos international border gate inaugurated

The authorities of the Central Highlands province of Kon Tum and Laos’ Attopeu province on January 18 held a ceremony to open the Bo Y-Phu Cua International Border Gate in order to facilitate trading activities between the two countries.

Vietnamese Deputy Foreign Minister Dao Viet Trung and his Lao counterpart, Phongsavat Boupha, who is also Head of the Laos Border Committee, were present at the event.

Being aware of its important position in socio-economics, culture, security and defence, the governments of Vietnam and Laos agreed to upgrade the Bo Y-Phu Cua into an international border gate.

The Bo Y International Border Gate Economic Zone has to date attracted 34 projects with a total registered investment capital of over VND 19 trillion (over US $1.2 billion). Of which, 11 projects have been zoned off land and four others, capitalised at nearly VND 422 billion (US $26 million), received investment licences.

Friday, January 18, 2008

PetroVietnam May Import Oil for First Refinery, Chairman Says

Vietnam, Southeast Asia's third- largest oil producer, may import crude this year for trial runs once the nation's first refinery is completed at Dung Quat Bay, the head of the state oil company said.

Vietnam Oil & Gas Corp. may process lower-quality oil from overseas instead of local crude, Dinh La Thang, chairman of PetroVietnam, as the company is known, said today. Vietnamese oil, which fetches premium prices in Asian markets, is more expensive because it contains less pollutants such as sulfur.

``Vietnam may import crude oil for its refineries because of economic effectiveness,'' Thang said in a phone interview, declining to say where or when the oil will be bought.

Vietnam's government has requested that the Dung Quat refinery start operations by the end of the year, Thanh Nien newspaper said Jan. 9, citing Deputy Prime Minister Hoang Trung Hai. The plant in Quang Ngai province is due to begin full operations in 2009.

Record economic growth is spurring fuel demand, prompting increased purchases of diesel and gasoline from refiners in China, Taiwan, Singapore and other countries.

Ho Chi Minh City-based PetroVietnam Trading Co., known as Petechim, a unit of state-owned PetroVietnam, may import 1.2 million barrels of crude oil this year for trial runs at the Dung Quat, Lao Dong newspaper reported yesterday, citing Nguyen Xuan Thang, general director at PetroVietnam Trading Co.

Bach Ho

Petechim sells a portion of the state oil company's Bach Ho crude variety through long-term contracts at a premium of $6.15 a barrel to the price of Indonesian grade Minas crude oil, a benchmark for medium-gravity, low sulfur crude in Asia, as assessed by two oil-pricing services, the Asian Petroleum Price Index and Platts.

Trafigura Beheer BV, an energy and commodities trader, on Sept. 7 signed an agreement to supply crude oil to Vietnam's refineries for 30 years, starting in 2009 when the first plant is set to be completed.

Under the accord signed on Sept. 7 in Ho Chi Minh City, Trafigura will provide crude oil to Vietnam's first and future refineries, said Ho Tung Vu, deputy director general of PetroVietnam Trading.

In 2006, Vietnam produced 367,000 barrels a day of oil, according to BP Plc's Statistical Review of World Energy. Indonesia and Malaysia are the two biggest crude oil producers in Southeast Asia. (Bloomberg)