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BUSINESS IN BRIEF 29/7   2009-07-29 - VNA

Nation attracts over 10 billion USD in FDI

The country attracted 10.1 billion USD in foreign direct investment in the first seven months of the year, according to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.

Of the sum, 53 percent was registered capital for 385 newly-licensed projects and 46 percent was additional capital for 125 existing projects. In the period, the materialised capital was worth 4.6 billion USD.

FIA said that in general FDI projects are on course to meet the goal of attracting 20 billion USD in FDI capital and disbursing 8 billion USD in 2009.

The processing and manufacturing industry attracted the largest FDI with nearly 88 billion USD, while real estate development ranked second with over 34.3 billion USD, followed by services, hotels and restaurants with 10.7 billion USD.

Taiwan has been ranked first among 87 foreign investors with 21.2 billion USD and 2,005 projects. The runners-up were the Republic of Korea with 20.1 billion USD and 2,201 projects, Malaysia with over 18 billion USD and 323 projects, and Japan with 17.6 billion USD and 1,116 projects.

Vietnamese businesses strengthen overseas investment

The recent simultaneous presence of two big names in the banking and aviation sectors in Cambodia shows that Vietnamese businesses have flexibly taken advantage of overseas investment opportunities amid the global economic crisis.

According to the Bank for Investment and Development of Vietnam (BIDV), in addition to having a representative office in Cambodia , the bank has also cooperated with the Phuong Nam Company to set up the Cambodia Investment and Development Joint Stock Company with initial capital of 100 million USD.

Meanwhile, the national flag carrier, Vietnam Airlines, has joined Cambodian partners to set up the 100-million-USD Cambodia National Airlines.

The US, Australia , EU, Japan and Singapore have also been named as potential destinations for Vietnamese business investment. At present, several investment projects in real estate, agro-forestry-fishery processing and software production in these countries are awaiting approval from the Foreign Investment Agency.

In the first six months of this year, Vietnamese businesses invested over 1.5 billion USD abroad, raising the country’s total overseas investment since overseas investment activities commenced in 1988 to over 5.9 billion USD.

In Laos , a traditional market which draws considerable investment from Vietnamese enterprises, the scope of investment has expanded to tourism services along with two traditional fields--mining and afforestation.

However, the size of Vietnam ’s investment projects is still small and the connection between Vietnamese businesses and the local market is limited.

According to the Ministry of Planning and Investment, a plan to provide information on markets and locations that Vietnamese businesses are targeting, which is part of the government’s overall overseas investment promotion programme, has been urgently implemented.
Regulations on Vietnamese businesses’ overseas investment have been revised in the direction of simplifying investment licensing procedures. The revisions are expected to be submitted to the government for approval later this year.

The list of priorities and regulations on remittance management relating to overseas investment activities has been amended in order to create a clear mechanism for Vietnamese enterprises to take advantage of low-cost investment opportunities during the crisis period.

Japan, Mekong sub-region boost economic ties

The Japanese Foreign Minister will meet his counterparts from Mekong sub-region countries in Siem Riep, Cambodia in October to discuss cooperation development programmes, Thai Foreign Minister Kasit Piromya said on July 27.

The meeting will focus on regional links via cooperation programmes, including the Ayeyawady-Chao Phya-Mekong and Emerald Triangle economic cooperation strategy.

He added that the event is a preparation for a high-ranking meeting slated to take place by year’s end between Japan and five Mekong sub-region countries: Cambodia , Laos , Myanmar , Thailand and Vietnam .

Japanese investors have also asked for a meeting with officials from these five countries on the sidelines of the ASEAN Economic Ministerial Meeting, scheduled for mid-August in Bangkok , Thai FM said the same day.

Japanese investors plan to expand trade and investment activities in ASEAN to compensate for the trade deficit between Japan and developed countries.

In order to narrow the gap between ASEAN’s old and new members, Japan has pledged 20 million USD for development projects in Mekong sub-region countries. The country set up the Japan-ASEAN Integration Fund in 2006.

Big domestic energy groups hook up

The country’s National Oil and Gas Group (PetroVietnam) and the National Coal and Mineral Industries Group (Vinacomin) signed a strategic cooperation agreement in Hanoi on July 28.

Under the agreement, both parties are committed to working closer with each other in their respective fields, particularly in energy. They agreed to exchange and share geological information about any coalfields that are discovered during exploration for oil in the Red River delta.

They will also cooperate in building an ammonium nitrate plant using gas provided by PetroVietnam to serve Vinacomin’s mining operations, as well as in developing infrastructure projects and also in real estate and finance.

On addressing the signing ceremony, PetroVietnam’s General Director Phung Dinh Thuc said that cooperation between the two groups would help boost and secure the country’s energy industry.

He said that both groups would soon start a number of important projects to research coal and gas reserves in the Red River delta basin, invest in mining for coal overseas and set up a joint stock company to import and ship coal from abroad to Vietnam to supply domestic thermo-electric power plants.

According to Vinacomin’s Chairman Doan Van Kien, the Red River Delta basin has estimated reserves of 210 billion tonnes of coal, discovered during the oil and gas exploration operations.

He said the coal reserves, that span from the continental shelf to the Nam Con Son oil field, could yield thousands of billions of tonnes.

The alliance between these two giants in natural minerals exploration and exploitation will bring huge benefits to both groups as well as the country, said Kien.

At present, coal supplies for domestic thermo-electric power plants are now an issue of concern as Vinacomin forecasts Vietnam will have to import coal from 2012.

Seafood exports likely to rebound

Exports of Vietnam ’s main seafood staples such as “tra” fish and shrimp are projected to recover in the last months of this year in terms of both price and turnover, said the Information Centre for Agriculture and Rural Development.

Information provided at a workshop on July 28 in Hanoi on the outlook for Vietnam ’s seafood exports showed that decreases in sales of pangasius and shrimp have slowed in the last three months.

This is considered to be an encouraging sign compared to the sharp declines registered for the first half of this year due to the global financial crisis, said a centre official.

Vietnam fetched over 148 million USD from 19,000 tonnes of shrimp in June, a rise of 13.5 percent in volume and 4 percent in value, compared to the same period last year.

“A recovery of exports for the product - which is considered a luxury in the time of the economic downturn - is a positive sign for seafood enterprises in the coming time,” said Nguyen Thai Phuong from the Vietnam Association of Seafood Exporters and Producers.

Traditional import markets for Vietnamese shrimp, such as the European Union and the US , are on the way to recovery. After a three-month downward slide, US shrimp imports from Vietnam started to rise again in April and remained at a stable, double-digit growth rate through the end of June.

In addition, China has now emerged as a new market for Vietnamese exporters with its continuously rising demand.

Statistics have shown that earnings from seafood exports in July rose by 8 percent to 410 million USD, from 380 million USD in June. However, the slight increase can hardly reverse the downward trend for total export revenues in the first seven months of this year, which comes close to 2.2 billion USD, a year-on-year decrease of 9 percent.

Vietnam has revised down its seafood export target for 2009 to only 4 billion USD from its previous ambition of 4.5 billion USD, set early this year.

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