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BUSINESS IN BRIEF 27/11   2010-11-27 - VNA

Hue paves the way for investment

Thua Thien Hue Province has given more preferential treatment to both domestic and foreign investors in its aim to become a city managed by central government, speakers at a conference said yesterday.

More than 250 businesses from HCM City and southern provinces attended the conference, held here by the Thua Thien Hue People's Committee.

Nguyen Van Cao, chairman of the committee, said the province aimed to become a centre of commerce, service and international transactions as well as one of the traffic hubs of the Central Highlands and the nation.

Under a plan by the Politburo, the city and region will become a centre for culture as well as science, technology and health services by 2020.

Dang Xuan Quang, deputy head of Foreign Investment Agency, said: "To further improve its investment climate, the province needs to make public and simplify its administrative procedures and improve its infrastructure system, especially the road, sea and aviation infrastructure, and improve its workforce quality."

He said close links should exist between schools, businesses and research institutions to improve training.

Le Dinh Khanh, deputy director of Thua Thien Hue Department of Planning and Investment, said areas to call for investment included eco-tourism, entertainment, tourism resorts and international standard 4-5 star hotels; hi-tech parks, industrial villages and new urban areas; and education and financial services.

The province has encouraged more investment in industries such as IT, bio-technology, electronics, hi-tech, manufacturing and engineering, production of materials for agriculture, forestry and aquaculture as well as handicrafts.

Among its investment policies, the province has offered incentives in industrial zones to help the projects finish on time.

Investors can lease land at a rate that is on average 0.65 per cent of the annual rate issued by the province.

The province has seven industrial parks and the Chan May-Lang Co economic zone, the key point for attracting investment.

A representative of a consulting company Akitek Tengarra, speaking at the meeting, pointed out that the tourism development plan of Thua Thien Hue by 2025 calls for 10 key projects that are expected to attract more investment.

The projects include a Phu Bai airport, an eco-village in Lap An lagoon with 12 hotels and 500 three-star villas, a resort in Bach Ma Hill, and a Meeting-Incentive-Conference-Exhibition (MICE) project.

Dang Cong Luan, director of the HCM City Department of Home Affairs, said enhanced transparency on land prices, administrative procedures and site clearance would create favourable conditions for investors.

"Thua Thien Hue will become an attractive investment destination in the near future," he said.

At the seminar, the provincial People's Committee granted investment licences to three companies, the International Transport Development and Investment Joint Stock Co, Viet Phuong Investment Group and Phong Phu Joint Stock General Co.

Two memorandum of understanding on project investment research have also been signed.

The province has a coastline of 128 km length and 22,000 ha of lagoons; Thuan An seaport and Chan May deep seaport can take vessels with capacity of 50,000 tonnes.

Thua Thien Hue's territorial waters have more than 500 types of fish and species of seafood of high economic value.

More than 100 mineral sites exist, with large reserves such as limestone, black and grey granite.

Areas of acacia plantation forest as raw material comprise 60,000ha and the areas of rubber 19.000ha.

Thua Thien Hue is located at the end of the East-West economic corridor connecting Myanmar-Northeast Thailand-Laos and Central Viet Nam.

Agricultural exports top year's targets

The total export turnover of agro-forestry and fisheries exceeded the sector's annual target, hitting US$17.23 billion in the first 11 months of this year, a year-on-year increase of 22.5 per cent, announced the Ministry of Agriculture and Rural Development.

At the beginning of the year, the target was set at $16 billion, the ministry said.

Major agricultural exports reached $8.82 billion, up nearly 22 per cent; fisheries brought in $4.55 billion, an increase of nearly 18 per cent; and forestry exports earned $3.23 billion, rising 31.4 per cent over the same period last year.

In November alone, the total export turnover was $1.75 billion, matching the October figure, the ministry said.

"Thanks to the recovery of the world economy, demand for these products has significantly increased. Export volume and value of most agro-forestry and fisheries products have increased, except for coffee and cassava," said director of the ministry's information technology and statistics centre Nguyen Viet Chien.

Rice has played a major part in the increased value and volume of exports.

In November, Viet Nam shipped 500,000 tonnes of rice abroad worth $235 million, bringing the total figures for the first 11 months to 6.3 million tonnes and $2.95 billion respectively.

The Philippines remains the biggest importer of Vietnamese rice.

The ministry said rice exporters would continue to enjoy advantageous conditions, with the recent news that Russia would cut one-third of its wheat exports.

"Trade in wheat is five-times higher than trade in rice. Russia's export limits will increase the world demand for rice and as a result, the price will go up. It will help Vietnamese rice exporters," the ministry said.

Rubber has been the most expensive export commodity. On average over the first 10 months, rubber cost over $2,800 per tonne, surging $1,270 compared to the same period in 2009.

"The cost of rubber has increased because of a drop in supply from traditional markets like Thailand, Malaysia and Indonesia due to natural disasters. Meanwhile, demand has strongly increased in China, the US and Japan," the ministry reported.

Thanks to this price hike, rubber export turnover in the first 11 months of the year increased by 286.4 per cent year-on-year to $1.92 billion, a significant increase given volume was only up by 4.84 per cent to 672,000 tonnes, the ministry said.

The price of pepper also increased. In spite of a 13 per cent decline in export volume, value soared by 20 per cent to $390 million for the first 11 months.

Forestry and wood-base products also experienced an increase in price over the same period. Export value reached $3 billion, a year-on-year increase of 32.6 per cent thanks to a 40 per cent increase to the US and 19 per cent increase to Japan.

Industrial production rises 13.8%

Industrial production will total VND717.14 trillion (US$35.9 billion) for the first 11 months of 2010, a year-on-year increase of 13.8 per cent, the General Statistics Office (GSO) estimates.

The growth reflected the recovery from the global financial crisis and economic contraction, said economist Nguyen Quang Ha.

Construction materials will make a heavy contribution to the growth.

Bricks, tiles and ceramics production has risen 32 per cent and cement 18 per cent.

Beverage production has grown 39.5 per cent and butter and milk almost 33 per cent.

Sport shoe production has risen 20 per cent with other footwear is up about 17 per cent. Metal products increased 24.6 per cent.

The power sector generated 83.5 billion Kwh to meet rising demand, a year-on-year rise of almost 14 per cent.

The GSO figures show the manufacture of 234,000 tonnes of paint products, up 29 per cent and about 8.6 million cubic metres of natural gas, up 18 per cent.

But crude oil production fell 11.5 per cent to 13.6 million tonnes.

Sugar production fell 7.4 per cent because of a shortage of raw materials and television sets 9 per cent because of shrinking sales.

Resort project licence revoked

Central Quang Nam Province People's Committee has revoked the investment licence for the US$4.15 billion Dragon Beach eco-tourism complex after the US investors failed to start the project as required.
Licensed in September 2009, Dragon Beach was to have been the major foreign-invested project of the central region.

The investors, Tano Capital LLC and Global C&D INC, had pledged to develop the resort on about 400ha in the Dien Ban District.

It was to have included nine hotels, international trade and conference centres, villas, entertainment facilities and a golf course.

But the joint venture had failed to demonstrate its financial capacity by handing over the required deposit within one year of the investment licence being granted, said Tran Van Tri, director of the provincial Department of Planning and Investment.

The company has also yet to pay for site clearance and resettlement, Tri said, adding that the department had asked the investor three times to implement the project but that there had been no response.

"Revoking the investment licence is in compliance with the law," Tri said.

The Ministry of Planning and Investment asked provincial administrations in early September to review the progress of several major foreign-invested projects.

These included the $9.8 billion Ca Na steel complex in Ninh Thuan Province; the South Korean AJ Vietstar Company's $1 billion project in Ba Ria – Vung Tau Province and the $7.9 billion Formosa steel complex in Ha Tinh Province.

Venture to distribute refinery fuel

Deputy Prime Minister Hoang Trung Hai has approved in-principle the establishment of a joint venture to distribute the products of the US$6 billion Nghi Son Refinery and Petrochemical Complex.

The PetroVietnam Oil Corporation (PV Oil) will hold at least 51 per cent of the joint venture's total investment capital.

But the Viet Nam Oil and Gas Group (PetroVietnam)'s subsidiary must first show that it has the capital and assets for the partnership and the joint venture will not affect its other tasks.

These include nation-wide oil distribution and ensuring price stability in accordance with the Government's instruction.

Deputy Prime Minister Hai has also authorised PetroVietnam to decide if its subsidiary can contribute more than 51 per cent.

He requires PetroVietnam to carefully assess PV Oil's restructuring of its production and business plans before joining the joint venture.

Nghi Son is Viet Nam's second oil refinery.

Located in central Thanh Hoa Province's Nghi Son Economic Zone, its planned capacity is 10 million tonnes of crude oil per year, or 200,000 barrels a day, 1.5 times higher than the Dung Quat refinery.

The refinery will eventually produce 2.3 million tonnes of petrol; 3.7 million tonnes of diesel and a significant amount of liquefied gas for domestic use.

Local telecom firm partners with Orange

The Company for Telecom and Informatics (CT-IN) has formed an alliance with Orange Business Services, a leading global integrator of communications solutions, to provide managed services to enterprises in Viet Nam.

Under the alliance, CT-IN – a member of the Viet Nam Post and Telecommunications (VNPT) Group will offer a comprehensive suite of management solutions to help enterprises manage their IT infrastructure reliably, efficiently and cost-effectively, and increase visibility and control of their entire IT infrastructure.

Sacombank pioneers UnionPay card

Sacombank, in co-ordination with China UnionPay, the leading bankcard association in China, launched the first UnionPay card in Viet Nam on Thursday.

The Sacombank UnionPay card is accepted in more than 90 countries, particularly in China, Singapore, Malaysia and Thailand.

The debit card holders can access their accounts at Sacombank ATMs for money withdrawal and transfer, or via cell phone with the Sacombank M-Plus service.

Big C opens lucky 13th location

Big C Viet Nam on Thursday opened its 13th supermarket in the country in the newly opened Ha Minh Anh shopping centre in Vinh Phuc Province's Vinh Yen City.

About 40,000 products are on the shelves.

The US$4 million outlet uses green technology which allows it to use 20 per cent less energy.

Furniture maker, Parkson VN sign deal

Thuy Duong Investment Joint Stock Corporation (TD Group), which runs the "Klassy" high-end furniture stores, signed on Wednesday a strategic co-operation agreement with shopping mall operator Parkson Viet Nam.

Under the agreement, the two sides will co-operate with each other in marketing and promotion campaigns, and join hands in discharging their corporate social responsibilities.

Diamond Tower project gets new investor

PetroVietnam Finance Land Joint Stock Co has transferred its investment capital of VND200 billion (US$10.3 million) in the Diamond Tower project to PetroIeum Construction Investment Joint Stock Co. Diamond Tower covers an area of 28,056sq.m, including five 40-storey buildings with 600 apartments.

Work begins on TV Tower in Ha Noi

Song Da 1 Joint Stock Co has broken ground for the TV Tower project in Duc Thuong residential complex in the western area of the capital. The project has a total investment capital of VND150 billion (US$7.7 million), and covers an area of 1,100sq.m.

1,600 apartments on offer at new urban area

Property developer Nam Cuong will offer nearly 1,600 apartments in the Duong Noi new urban area from today until the end of this month. The average price is said to be VND22 million (US$1,128) per square metre excluding VAT.

According to the developer, the Duong Noi new urban area on Le Van Luong street includes 14 multi-storey buildings, covering an area of 52,000sq.m.

Sacomreal invests in apartment project

Sai Gon Thuong Tin Commercial Real Estate JSC or Sacomreal has started the construction of the Hung Vuong Sacomreal apartment complex in the city.

The complex, built with a total investment capital of VND300 billion (US$15.4 million), is expected to be completed in the first quarter of 2013.

Construction starts on service, trade centre

Binh Duong Investment, Consultant and Construction JSC has broken ground on the Bach Dang Service and Trade Centre in the southern province of Binh Duong.

The project, worth VND940 billion (US$48.2 million), will cover an area of 67,000sq.m. — VNS

SBI Securities eyes FPTS stake

Japan's SBI Securities Co, a SBI Holdings Inc's subsidiary, announced on Thursday it would buy a 20 per cent stake in Vietnamese FPT Securities Co (FPTS).

The acquisition, worth about 2 billion yen (US$23.85 million), will be carried out in a private placement.

A representative of FPTS refused to comment on the Japanese company's announcement when she was contacted yesterday via telephone. She said the two companies had just started negotiations.

FPTS, a securities arm of information technology firm FPT Corp, was ranked fifth in terms of market share in the third quarter on the HCM City Stock Exchange and ranked second on the Ha Noi exchange.

Hoa Phat sets up subsidiary

Industrial Hoa Phat Group (HOSE:HPG) has just established a new subsidiary - Hoa Phat Steel, LLC - which produces iron, steel and cast iron.

The new company has a charter capital of VND600 billion (US$30 million) in northern Hung Yen Province and is wholly owned by the group.

HPG ealier reported it earned a net profit of VND1.08 trillion ($54 million) in the first 10 months of this year, 80 per cent of its annual target. It also announced December 3 as the deadline for shareholders to register to participate in the first dividend payment this year.

Cash dividends will be paid on December 15 at a 20 per cent ratio.

Foreign ownership limit at 40.37%

Foreign ownership in the HCM City Infrastructure Investment Co (HOSE:CII) would be anchored at 40.37 per cent starting from yesterday, the HCM City Stock Exchange announced.

CII currently lists more than 75 million shares, 38.6 of which were owned by foreign investors as of October 29.

Last week, the company signed an investment agreement with Goldman Sachs Investment Partners, a fund managed by Goldman Sachs Asset Management, which will issue convertible bonds worth US$25 million to the fund to finance its investment projects. It is also seeking shareholder approval for an additional $15 million investment from this fund.

Tourism company's profit falls

Vinpearlland Co (HOSE:VPL) reported its third quarter net profit fell over 10 per cent from the same period last year to just VND46.4 billion (US$2.3 million), lifting the total figure for the first nine months to almost VND87.8 billion ($4.4 million).

VPL's revenue rose 36 per cent year-on-year to almost VND562 billion ($28.1 million) from January-September, owing to high earnings from tourism services and financial investments. But its financial cost increased 191 per cent to reach over VND427.6 billion ($21.4 million).

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