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BUSINESS IN BRIEF 11/12   2008-12-11 - VNA

Lao Cai trade and tourism fair opens

The Lao Cai Trade and Tourism Fair opened on Dec. 10, with nearly 100 businesses of all economic sectors in northern Lao Cai province and its neighbouring localities showing their products and services at 150 pavilions.

In addition to Lao Cai’s traditional partners from Hekou , China , a number of businesses from Thailand take part in the fair.

On sale at the fair are various Vietnamese, Chinese and Thai goods, including household commodities, food, electric and electronic products, engineering products, drinks, textiles and garments, leather and footwear, ceramics, handicrafts and interior decorations.

A large area in the fair has been marked out to introduce special products of different localities.

The fair and the upcoming Den Thuong spring fair 2009 will help retailers in Lao Cai to gradually get access to the domestic and regional markets, said Tran Khanh Ngoc, deputy director of ECT Company – a co-organiser of the event along with the provincial People’s Committee and the local Industry and Trade Department.

Vietnam Airlines to increase flights to Germany

Vietnam Airlines said it plans to increase its frequency on the routes between Hanoi , Ho Chi Minh City and Frankfurt to six flights every week from the current five next year to meet the increasing demand of German passengers.

The airline’s branch in Germany told local agents at a year-end meeting in Berlin on Dec. 10 that the number of German passengers is increasing and currently represents 52 percent of passengers to Vietnam on these routes.

Vietnam Airlines branch director Nghiem Van Khanh said last year, Vietnam Airlines signed contracts to buy 29 aircrafts of Boeing and Airbus to add new wings to its existing fleet of 49. The figure is expected to reach 104 in 2015 and 150 in 2020 to help make Vietnam Airlines a major air carrier in the region.

Khanh also said he hoped that Vietnam Airlines would continue running business successfully in the German market.

During the meeting, the branch also spoke of its business results this year and plan for 2009 to raise its position in the German market.

Saigontourist welcomes 900,000 int’l visitors

The Saigontourist Travel Service Company is expected to receive more than 1.5 million visitors, including 900,000 foreigners, this year, general director Nguyen Huu Tho said on December 12.

The company posted a turnover of nearly 7.5 trillion VND this year, a 14.4 percent increase over 2007.

Tho said in order to better serve the increasing number of international visitors to Ho Chi Minh City , Saigontourist has launched a number of projects to upgrade luxury hotels develop tourist sites.

It is boosting promotional activities with an expectation of receiving more than 1.6 million visitors next year and ensuring a growth rate of 13 percent or more.

To achieve the target, the company will also join hand with Vietnam Airlines to offer tours with reasonable prices, organise cultural and art programmes exhibitions, both at home and abroad to lure more visitors.

Plan to boost bond market

The Ministry of Finance will attempt to raise the liquidity and attractiveness of the nation’s bond market during 2009, a ministry official told Vietnam News Agency on condition of anonymity, following last week’s Vietnam Business Forum .

Among planned measures, the ministry would increase the number of bonds issued in large batches over the current practice of issuing issuing smaller batches, the official said.

The ministry will also restructure existing bonds by organising them into several basic classes, a move expected to help boost their value and liquidity on secondary markets.

A capital markets working group set up by a number of fund management firms confirms that there are currently more than 500 Government bond issues outstanding with an average size of less than 20 million USD.

“The absence of large, tradable bond issues leads to an illiquid and inefficient market,” said group member Dominic Scriven.

The working group has suggested that market regulators make bond issues of 300 USD to 500 million USD, which would have a more significant impact on market depth and liquidity.

The regulators should also consider a buyback or convertibility programme for several smaller bond issues to be replaced by a few larger issues, the group has said, as well as marketing bonds to a broader investor base.

As part of its plans to boost bond market, the ministry official said it was encouraging enterprises to look for ways to corporate bond issues instead of bank loans as a way to raise capital for projects or business expansion.

A wide variety of corporate bonds would help diversify the markets not only as a channel for raising capital but also as a way to market domestic trademarks overseas.

The ministry was also exploring derivatives, future contracts and other options to diversity bond trading. “Market regulators should set up a legal framework to instruct investors in using these,” said independent securities analyst Huy Nam.

By October of this year, Government bond issues had raised 18.7 trillion VND (1.11 billion USD), representing 52 percent of the year’s target, according to ministry figures.

Vietnamese businesses in Germany look home for opportunities

The Association of Vietnamese Businesses in Germany met with a visiting delegation from the Bank for Investment and Development (BIDV), led by its Vice General Director Hoang Huy Ha in Berlin on Dec. 9.

The two sides exchanged views on the future prospects for 8,000 businesses run by overseas Vietnamese in Germany , including 200 companies that specialise in import-export.

They discussed avenues of opportunity for cooperation between Vietnamese businesses in Germany and BIDV and other businesses in Vietnam .

The Duc-Viet (Germany-Vietnam) Company of the Association of Vietnamese Businesses in Germany and BIDV are partners in a joint project to construct a Duc-Viet urban area in Xuan Phuong, Hanoi .

The Association of Vietnamese Businesses in Germany , officially launched in September 2006, has established close ties with many provinces, cities and partners in their home country.

The association is carrying out a number of joint venture projects in central Binh Thuan province, HCM City and Hanoi , and is eager to expand the scope of its cooperation with domestic partners, as well as helping Vietnamese businesses at home and in Germany to establish economic links with one another.

Island district to have wind power

The Swiss company, Aerogie.Plus Solutions Inc. signed a contract on electricity sale with Con Dao district in the southern coastal province of Ba Ria-Vung Tau on Dec. 9.

Swiss company received a licence in 2007 for a wind-power project in the island district, with a design output capacity of 7.5 MW. The wind farm is expected to be commissioned by 2010.

Preparatory steps such as wind measurements, technical designs and plans for transport and equipment installation are already underway with first phase investment estimated at 20 million EUR.

The first ever wind-power project in the island district will be refurbished twice during its estimated 30 years of operation.

The tourist haven of Con Dao island, where demand for electricity has surged by 48 percent a year, currently has just one diesel-fueled power plant with an output capacity of 3 MW, just enough to meet daily demand.

Govt approves additional central hub

The Prime Minister has signed off a project regarding Chan May-Lang Co economic park, in the central province of Thua Thien-Hue , adding an additional economic hub to the central region to join the Dung Quat economic zone in Danang city.

Once completed in 2025, the 27,108 ha economic park will serve as a major port city to provide deep-water seaport services and handle shipments of cargo for the key central economic zone.

The Chan May urban area and other key centres, such as those involved in commerce, financing, information, healthcare and training, will eventually occupy more than 1,500 ha near the banks of the Bu Lu and Thua Luu rivers and at the foot of Phuoc Tuong mountain.

The park has also been designed to act as a tourist site covering 4,570 ha, that will provide luxury eco-tourism services.

The park is convenient to transport links, with excellent land and rail connections, as well as waterways.

By land, the park is connected to highway 1A and the six-lane North-South Expressway.

China, Vietnam consolidate investment links

The Chinese government attaches great importance to increasing its investment ties with Vietnam , particularly with regard to turnkey projects, a representative of the Chinese Embassy in Vietnam said during a press briefing in Hanoi on Dec. 10.

Sharing this view, Chinese Trade Counsellor Hu Suo Jin pointed out that, since the two countries established diplomatic ties in 1991, Vietnam and China have recorded a total of 10 billion USD in turnkey contracts. Vietnam is now China ’s second largest turnkey project market, he said.

The Chinese Ministry of Trade will organise an exhibition featuring mechanical engineering technology in Hanoi between Dec. 11-13, he added, saying he hoped that the exhibition would offer opportunities for businesses from both countries to stimulate investment cooperation and coordination to help cope with the global financial crisis.

More than 40 Chinese businesses involved in the construction, engineering and equipment manufacturing industries will be present at the exhibition, showcasing the latest in advanced technologies, materials and equipment for the civil engineering, power, telecom and irrigation sectors.

Vietnam and China have experienced rapid development in trade cooperation and China has become one of Vietnam ’s leading trade partners.

During the first ten months of 2008, the two countries’ bilateral trade turnover surpassed 17 billion USD, a year-on-year increase of 43 percent and 1 billion USD more than 2007’s figure.

The figure is expected to hit 21 billion USD for the whole year.

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