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BUSINESS IN BRIEF 30/5   2009-05-30 - VNA

1.15 billion USD steel project gets go-ahead

A multilateral foreign-invested steel project has been licensed in the My Xuan A2 Industrial Zone (IZ) in the southern province of Ba Ria-Vung Tau, said the province’s IZ management board.

The board’s deputy head, Nguyen Van Lam, said that the 1.15 billion USD project is a joint venture between several foreign investors with the China Steel Group from Taiwan, Sumitomo Metal Industries and Sumitomo Corporation both from Japan the major partners.

Once operational in 2013, the factory will produce 1.6 million tonnes of products annually, including steel plate, hot and cold-rolled steel, steel coil, to service the ship-building, mechanical engineering, automobile and electricity/electronics industries.

This is the province’s second largest steel project, following the one invested in by the Posco Group from the Republic of Korea.

The nations steel industry has so far attracted over 30 foreign-invested projects, of which the Ca Na Steel Complex in the southern province of Ninh Thuan, is the biggest. This 9.8 billion USD project is a joint venture between the Malaysian Lion Group and Vinashin from Vietnam.

EU remains Vietnam’s largest export market

The European Commission Delegation to Vietnam has announced its report on the economic situation and business and investment environment in Vietnam which confirms that the EU remains Vietnam ’s premier trading partner and is the largest export market of the country.

Speaking at a press conference in Hanoi on May 29, Commercial Counsellor Antonio Berenguer cited data of the EC Statistical Office (Eurostat) that showed the EU absorbed approximate 8.3 billion EUR (12.2 billion USD) of Vietnamese exports in 2008, surpassing the US, which imported 11.86 billion USD worth of goods from the Southeast Asian country.

“The EU has further improved its role as a major partner of Vietnam in economic terms and the bloc’s imports from Vietnam also continued concentrating on intensive-labour products,” he said, adding that footwear continued to be the biggest export sector between the two markets.

In addition, the EU is the second largest investor, after Japan , in terms of cumulative implemented investment in Vietnam with 7 billion USD or 60 percent of EU committed investment, according to Vietnam ’s Foreign Investment Agency data. This ratio is four times higher than the 2008 national average, confirming the commitment of the EU business community with Vietnam, even in times of crisis.

The Green Book 2009, which presents the assessment of the EC Delegation to Vietnam and the EU Member States’ Trade Counsellors, also confirms that the Vietnamese government successfully managed to contain inflation by tightening monetary policy and applying fiscal restrain in the face of the overheating economic growth.

According to the report, 2008 witnessed a very decent GDP growth of 6.18 percent and all 2009 forecasts by the government and private actors still place Vietnam among the only 12 world economies registering positive economic growth during that period.

“The EU concurs with many analysts in that the dragon has slowed down and is certainly suffering but it is still in reasonable shape and is perfectly capable of coming back to full health as soon as the external conditions – its external markets – allow,” the report says.

However, EC Trade Counsellors recommended that Vietnam should limit red-tape, continue the pace of trade liberalisation, including the negotiations of FTAs with major trading partners like the EU, and the further strengthening of the IP protection system, infrastructure, human resources as well as bankruptcy regimes in order to attract higher quality investment, especially in the technology sector.

Indian animal-feed firms seek to expand

A 15-strong delegation from the Solvent Extractors’ Association of India met executives from more than 70 Vietnamese companies in HCM City on May 28 in an efforts to find new clients for oil meals (ground seeds) used in animal feed.

Ashok Sethia, SEA’s chairman, said the visit came in the wake of a recent fall in the consumption of oil meals in traditional Southeast Asian markets, especially Vietnam .

SEA is seeking to conduct a study on the demand for oil-meal products and quality requirements in the country.

It also wants to enhance ties and explore opportunities for cooperation with Vietnamese oil-seed crushers and processors, vegetable-oil refiners, feed-processing plants, and importers of oil meals and oils.
India is one of the leading suppliers of oil meals to Southeast Asia , selling soybean meal, rapeseed meal, groundnut meal and rice bran.

In the 12 months to March this year, Vietnam imported 1.5 million tonnes of oil meals from India , becoming the largest buyer in Southeast Asia , Thanh said.

Dr. Jitendra Nath Misra, the Indian consul general in HCM City , said India was becoming a significant investor in Vietnam with high disbursement rates, adding Vietnam was the top destination for Indian investments in Southeast Asia.

VN-Index declines on profit taking

The VN-Index finally yielded to the building profit-taking pressure of the last three sessions to close down on May 28 to 415.45, a loss of 2.29 percent.

Losers outnumbered gainers by 120 to 51, and volumes dropped 17.85 percent from May 27’s brisk session on the HCM Stock Exchange, reaching a still-respectable 47.4 million shares and attaining a combined value on the day of 1.55 trillion VND (87.6 million USD). Foreign investors accounted for 1.3 million of the day’s trades.

Sacombank (STB) remained the most-active share on May 28, with nearly 5.5 million traded, accounting for 11.58 percent of total market volume.
STB shares closed down 900 VND to 26,100 VND.
Vietnam International Securities Co wrote in its daily report that investors were worried the VN-Index had reached a resistance point and was going to weaken again.

In Hanoi , the HASTC-Index was also down at 142.3. The value of the day’s trades on the northern bourse was 747.6 billion VND on a volume of 26.5 million shares. Asia Commercial Bank (ACB) was the most-active share, with a volume of 4.2 million, followed by Kim Long Securities (KLS) at 3.4 million.

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