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BUSINESS IN BRIEF 25/11   2009-11-25 - VietNamNet/VNA

Vietnam urged to improve infrastructure, facilitate investments

Firms from the Republic of Korea (RoK) have asked Vietnam to improve its infrastructure along with creating better conditions for overseas investors.

Vietnam especially needs to improve its transport network, which includes opening more direct international flight routes as well as increasing the number of domestic flights in order to facilitate investment projects, said the RoK companies at a workshop on investment opportunities in Vietnam, held in Seoul, the RoK, on Nov. 25.

The Vietnamese Ambassador to the RoK, Pham Tien Van, confirmed that after 20 years of Doi Moi (the renewal process) and having made many significant economic achievements, Vietnam has become an attractive destination for the international business community.

The Vietnamese government has also paid a lot of attention to attracting investment in supporting industries – a huge potential area, he added.

He answered a number of queries raised by RoK businesses on Vietnam ’s administrative procedures and its financial regulations.

At the workshop, representatives from the Ministry of Industry and Trade and the Ministry of Planning and Investment gave presentations on the opportunities that Vietnam holds for potential investors, how the country’s infrastructure and its human resources are being developed, as well giving a run down on the country’s priority policies for foreign investments.

Later, representatives from the northern provinces of Bac Ninh and Phu Tho gave a briefing on their provinces’ development potential and called for closer ties in industry, particularly in engineering, transport services, education and training, mining for minerals and steel production.

During the workshop, the Kinh Bac Company from Bac Ninh province signed a contract worth 30 million USD with a RoK partner to build a satellite factory for Samsung Electronics, which has just put into operation a factory to manufacture mobile phones in the province.

With the theme, Vietnam – an opportunity for investment in industry, the workshop drew more than 170 representatives from the RoK’s business community plus investors, information agencies and trade promotions and investment organisations.

Oil refinery produces nearly 1 million tonnes of products

The nation’s first oil refinery has turned out 803,387 tonnes of products since it started trial operation in August, according to the Vietnam National Oil and Gas Group (PetroVietnam).

The refinery had to temporarily shut down on August 18 as a broken valve was discovered in the residue fluid continuous cracking apparatus (RFCC), which makes gasoline and other products. It resumed operation on October 1, 2009.

The plant is scheduled to finish its test-run in November 2009 and be transferred to its investor no later than early January 2010.

Dung Quat refinery is designed to provide each year 110,000 tonnes of propylene, 300,000 tonnes of liquid gas, 1.9 million tonnes of different kinds of fuel, 410,000 tonnes of J-A1 aviation oil, 3 million tonnes of diesel oil, and 330,000 tonnes of fuel oil (FO).

Vietnam financial sector attractive for investors

Vietnam has become a preferred destination of international financial investors due to the rapid liberalisation, privatisation and globalisation of the economy, the US market research company RNCOS said in a recent report.

The banking sector has shown unprecedented growth in the recent past, said the report "Vietnam Financial Sector Forecast to 2013", adding that the sector remains largely underdeveloped compared to the banking sectors in other Asian economies like India and China.

According to the report, the banking sector has huge potential for further growth and banking assets are expected to grow at a CAGR of over 22 percent during 2009-2013.

Most of the Vietnamese are still unfamiliar with banking services and use traditional ways of saving money and financing their needs, the report explained.

Similar to the banking sector, the report said, the insurance sector has also expanded rapidly over the past few years with the total annual premium growing at a CAGR of over 20 percent between 2002 and 2008.

Despite the fast expansion, the insurance sector is still left with ample of unexplored opportunities like professional liability insurance, export credit insurance, energy price insurance, it added.

The report "Vietnam Financial Sector Forecast to 2013" is an outcome of in-depth research and detailed study of the Vietnamese financial sector and its various products and services.

The report analyses all the factors which are critical to the success of banking and insurance industry of the country. It also identifies the key industry trends, including opportunities and challenges, serving global banking players, investors and financial service providers in planning their business strategies.

Vietnam-Myanmar trade fair resumes

An international trade fair to showcase Vietnamese and Myanmar products wrapped up in Rangoon, Myanmar, on Dec. 22, after drawing over 60 businesses from the two countries.

The four-day event was part of a trade promotion campaign launched by Vietnam and also the first international trade fair ever held in Myanmar in the past four years.

Vietnamese businesses brought products to show off their strengths, ranging from farming machines to fertilisers, and electronics and electrical appliances, rubber products, consumer goods and stationery.

Present at the opening ceremony on Nov. 19, Deputy Minister of Industry and Trade Nguyen Thanh Bien of Vietnam and his Myanmar counterpart, Senior Colonel Aung Tun, spoke of their mutual determination to further develop commercial and investment relations in line with their traditional ties.

In the framework of the trade fair, the two sides held a business forum with the participation of over 200 businesses from the two countries as evidence of a keen interest from business circles in the opportunities for trade and investments in each other’s markets.

Vietnam and Myanmar have made remarkable progress in trade over the past years, recording 108 million USD in two-way trade revenue in 2008 against just 2.5 million USD in 2002.

SAM, REE cooperate to set up foreign investment fund

The Saigon Asset Management Fund Joint Stock Co (SAM) has signed a cooperation contract with RNG, a domestic fund management company controlled by Refrigeration Electrical Engineering Joint Stock Corp (coded REE) to set up a foreign investment fund.

The foreign investment fund is expected to have a total value of 100 million USD intended for real estate projects.

SAM and RNG are expected to invite well-known investors, consultants, senior experts and managers from leading companies at home and abroad to participate in the fund, which aims to find investment opportunities brought about by the recovery of Vietnam’s economy. They plan to meet foreign investors in the US, Europe and Asia in early 2010.

This investment model can be spread throughout Vietnam to benefit investors and help raise the country’s competitiveness in the world market, REE Chairman and General Director Nguyen Thi Mai Thanh said, adding that this combination of leading companies will bring about many attractive investment opportunities as well as make it easier for the fund to access key experts in many fields.

According to SAM Chairman and General Director Louis Nguyen, foreign investors continue to praise the growth of the securities market in Vietnam as well as the country’s long-time economic development.

Established in 2007, SAM is currently managing approximately 125 million USD of assets, including listed securities, private equity, and real estate assets.

Meanwhile, REE was established as a state-owned company in 1977. In 1993, REE became the first equitised company in Vietnam. It now holds 63.7 percent of the statutory capital of RNG.

China’s Oil Corp. wants to cooperate with Petrovietnam

China’s Sinopec Corp. wants Petrovietnam to refine its crude oil at Vietnam’s Dung Quat Oil refinery, and also buy high-grade crude from Vietnam.

Vice Chairman and President Wang Tianpu of the China Petroleum & Chemical Corporation (Sinopec Corp.) made the statement at a working session with the Vietnam National Oil and Gas Group (Petrovietnam) leaders in Hanoi on Nov. 24.

Sinopec Corp. stands ready to provide crude oil to the Dung Quat oil refinery and buy crude from Vietnam’s White Tiger oil field to manufacture deluxe petrochemical products, Wang added.

Chairman of Petrovietnam’s Board of Directors Dinh La Thang emphasised that his group is willing to cooperate with Sinopec Corp. in oil and gas exploitation in Vietnam, China and other countries--based on each country’s respect for sovereignty and territorial integrity.

Petrovietnam has signed 21 oil and gas exploitation cooperation contracts with foreign partners, Thang said, stressing that Sinopec Corp. can join Petrovietnam in these contracts.

In the petrochemical refinery field, Sinopec Corp. can buy Dung Quat oil refinery shares once they are equitised, as well as provide raw crude to the plant, he added.

Thang proposed that the two sides set up a working group to consider and implement concrete cooperation in the near future, with Petrovietnam Deputy General Director Nguyen Quoc Thap being directly involved in the group.

After the working session, Petrovietnam Oil Corporation, a subsidiary of PetroVietnam, signed a memorandum of understanding (MOU) on crude oil trading with the China International United Petroleum & Chemicals Co., Ltd. (UNIPEC), a wholly owned affiliate to Sinopec Corp.

Each year, Sinopec Corp. is capable of turning out 42 million tonnes of crude oil in China and 12 million tonnes of crude oil overseas as well as 10 billion cubic metres of liquefied petroleum gas. Its oil refineries produce up to 200 million tonnes of fuel and 8 million tonnes of chemical products a year.

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