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BUSINESS IN BRIEF 15/7   2008-07-15 - VNA

Ministry shoots at 61.2 billion USD in export turnover

The Ministry of Industry and Trade has announced it is implementing a number of measures to reach the target of 61.2 billion USD in export turnover, or a 26 percent year-on-year increase.

The measures include increasing added value for traditional items and those limited to increase in volume, particularly farming, forestry and seafood.

In addition, credit priority will be given to farmers and processors of seafood, rice, coffee, cashew nuts, fine arts, wood and plastic products.

The ministry also says it is intensifying its national programme on trade promotion and is calling on big foreign investors to get involved in production of goods for export.

Administrative reform in tax and customs procedures will also be continued to facilitate exports, and exporting services are being encouraged to increase the revenues in foreign currencies and reduce trade deficit.

Alongside these measures, the Ministry of Industry and Trade says it is also working on a plan to intensify export and curb trade deficit from 2008-2010 to submit to the Government for approval in the fourth quarter this year.

Dai-ichi Life Vietnam collects premiums through post offices

The Dai-ichi Life Vietnam , a subsidiary of Dai-Ichi Life Insurance of Japan, and the Vietnam Postal Savings Service Company (VSPC), on July 15 officially launched a premium collection service through the VPSC’s network.

Dai-ichi Life is the second largest life insurance company in Japan and one of the top players in the global life insurance industry. It entered Viet Nam in January 2007 and Dai-ichi Life Vietnam now has an investment capital of 72 million USD.

HSBC again named best foreign bank in Vietnam

The Hong Kong Shanghai Banking Corporation (HSBC) has recently been named the best foreign bank in Vietnam by the leading financial publication Finance Asia.

This is the third consecutive year the bank has received the prestigious award, which acknowledged HSBC’s performance in the second half of 2007 and the first half of 2008.

HSBC was the first foreign bank to own 15 percent in a domestic bank in Vietnam as it increased its stake in the Vietnam Technical and Commercial Joint Stock Bank (Techcombank) in July 2007.

Two months later, the bank purchased 10 percent of shares from the Bao Viet Insurance Group.

HSBC was the vanguard in introducing chip credit cards to Vietnam in March 2008.

In addition, the bank is owning the biggest number of automated teller machines (ATMs) among foreign banks in Vietnam with 82 ATMs.

HSBC now is the largest foreign bank in Vietnam in terms of capital, network of branches, kinds of products, numbers of staff and clients.

Mekong Capital’s fund to invest in Golden Gate

Fund management firm Mekong Capital announced that the Mekong Enterprise Fund II has committed to investing 2.6 million USD in the Golden Gate Trade Services Joint Stock Company.

Golden Gate operates a popular mushroom hotpot restaurant chain under the Ashima brand, with seven facilities in the country’s major cities of Hanoi , Ho Chi Minh City and Hai Phong. It is planning to open another restaurant in the central city of Da Nang .

Mekong Capital Managing Director Chris Freund said that the founders and management team of Golden Gate have done an extraordinary job at quickly establishing Ashima as the leading hotpot chain in Vietnam . He expected the company will continue its rapid expansion.

The 50 million USD Mekong Enterprise Fund II, which was launched in June 2006, focuses on well-managed and fast-growing private companies to help them prepare for successful listing on the stock market.

Golden Gate is the fund’s 7th investment partner. The fund has previously invested in the International Consumer Products (ICP), the Ngo Han Magnet Wire Joint Stock Company, the Mobile World Joint Stock Company, the Venture International (Vietnam), the MK Smart, and the Mai Son Joint Stock Company.

WB commits 1.2 billion USD in aid to Vietnam

The World Bank will provide Vietnam with 755.6 million SDR (equivalent to 1.2 billion USD) in aid from the International Development Assistance (IDA) source for the 2009 fiscal year.

The WB Executive Director in charge of Southeast Asia, Mat Aron Deraman, announced the decision at his meeting with State Bank of Vietnam Governor Nguyen Van Giau in Hanoi on July 14.

The IDA funding will be allocated to 12 programmes or projects, in addition to one project to be funded by the International Bank for Reconstruction and Development (IBRD), he said.

The aid came as the result of Vietnam ’s success in improving its business environment with its ranking in the WB’s 2008 report up by three places to the 91th among 178 countries, according to Deraman.

The World Bank’s 2009 fiscal year starts from July 1, 2008 to June 30, 2009.

Green labels to appear on commodities as from 2009

Green labels or eco-labels will be applied on commodities on a trial basis as from 2009 and nationwide as from 2012, the Directorate for Standards and Quality (STAMEQ) has said.

The labels, issued by the Environment Protection Department, aim to encourage the production and consumption of environment-friendly products, thus build up awareness of environment protection for businesses.

Vietnam aims to have 10 percent of exported goods and 50 percent of goods for the domestic market bearing green labels by 2020.

Specific tax to be imposed on coal exports

Deputy Prime Minister Nguyen Sinh Hung has given the nod to the Finance Ministry’s proposal to impose quotas and specific tax on coal exports.

The Government Office on July 14 sent an official dispatch to the Ministries of Finance, Industry and Trade, and Justice to inform them on the deputy PM’s opinions regarding the issue.

In the dispatch, Deputy PM Hung asked the Finance Ministry to coordinate with the Ministry of Industry and Trade as well as relevant agencies to work out a concrete implementation plan to submit to the PM for approval.

1.5 trillion VND for safe water network in Tien Giang

The Mekong Delta province of Tien Giang on July 17 broke ground for the construction of a water work with a daily capacity of 90,000 cu.m. in Chau Thanh district.

The 1.5 trillion VND project, including a 44.5 km pipeline network to supply safe water for four eastern districts and townships, is expected to be put into operation in 2010.

US helps Vietnam develop textile and garment industry

The US ’s cotton associations have pledged to help Vietnam to develop its textile and garment industry, according to the Vietnam Textile and Apparel Association (VITAS).

An agreement on cooperation has been inked between VITAS, and the Texas Cotton Association and the Cotton Council International of the US .

Under the agreement, the US side will supply cotton and provide technical assistance to Vietnam .

They will also help in personnel training and co-organise trade promotion activities.

The US is the biggest cotton supplier in the world, producing over 3.2 million tonnes in the 2008-09 crop. It is also the biggest cotton provider for Vietnam , making up 30 percent of the country’s imported cotton volume.

Meanwhile, Vietnam has been in the top five exporters of textile and garment to the US for the past three consecutive years, with an export value of 4.29 billion USD per year.

This year, Vietnam is expected to export 5.4 billion USD worth of textiles and garments to the US market to secure the second place behind China in the export of those products to the country.

Vietnam-potential export market for India

A study by the Federation of Indian Chambers of Commerce and Industry (FICCI) on India-Vietnam trade shows that Vietnam has become a potentially lucrative export market for India.

Additionally, top Indian corporations such as Essar and Tata Group are making big-ticket investments in projects in Vietnam, the Indian Express quoted the study as saying.

According to the study, key sectors where Indian exports can make headway in the Vietnamese market include IT and IT training, agro and food processing, railways, energy and alternate energy, power transmission and generation.

In 2004, India extended a credit line of 27 million USD to Vietnam. Last year, India officially announced another line of credit worth 45 million USD for Nam Chien Hydropower project.

Bilateral trade has been growing rapidly from 72 million USD in 1995 to over one billion USD in 2006, with an average growth rate of 20 per cent per annum.

The Tata Group and Essar signed MoUs with the Vietnamese government last year to set up steel facilities worth more than 4 billion USD, according to the Indian paper.

Phu Yen licenses six new projects

Central Phu Yen province has licensed six new projects with an investment capital of nearly 4.41 billion USD, the provincial chairman Pham Ngoc Chi announced on July 14.

The four tourism and two production projects will be carried out this year on an allocated area of 930ha. Of these projects, the biggest is a 4.34 billion USD high-grade tourism complex.

The 565ha project from the New City Properties Development Company of Brunei will include resorts, luxury hotels, sports areas and other services.

The chairman also announced an investment plan of 21 projects in the locality, especially three projects from the Sama Dubai corporation worth a combined one billion USD that have been approved by the Prime Minister.

Another 18 projects involve tourism, granite processing, aquaculture and hospital and have a registered capital of 293 million USD.

Southern province invites infrastructure investment

Embarking on a plan to build an industry-driven economy by 2020, southern border Long An province is focusing on developing industrial zones and a well-serviced transport and communications network.

At an investment promotion seminar held in Hanoi on July 14, the province invited local and foreign investors to invest in 12 transport and communications projects it will develop from 2008-2010. The estimated total capital for the infrastructure projects is 1.6 billion USD.

Its location at the junction of southeastern and southwestern regions around 42km from economic hub Ho Chi Minh City and sharing a border with Cambodia makes Long An a particularly attractive destination for investment.

At the end of last year, Long An came out on the top of the Vietnam Chamber of Commerce and Industry’s survey in terms of investment incentives on land access and management and use.

Also in the survey, it ranked 21st in terms of competitive capability, largely owing to its abundant land fund, a young skilled workforce and a vast material supply area.

The province is currently awaiting approval from the Ministry of Planning and Investment’s for the construction of the Binh Hiep border-gate economic zone, a hi-tech park, and an industrial zone and urban area in Thu Thua

Long An currently houses 219 foreign-invested projects with a combined registered capital of 2.1 billion USD, mainly from regional, American and British investors in animal feed production and furniture making and construction.

The locality drew in 25 invested projects capitalising at 225 million USD in the first six months of this year and expects to attract a total of 50 projects worth 800 million USD by the end of the year.

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