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BUSINESS IN BRIEF 4/9   2008-09-04 - VNA

Sanyo to build electronic component factory in Bac Giang province

Japanese electronics manufacturer Sanyo will break ground for an electronic component factory at the Quang Chau Industrial Zone in northern Bac Giang province on September 5.

The Sanyo-HQ Vietnam Electronic Component Co. Ltd said the 60,000sq.m factory will be built at an initial cost of 95 million USD and is scheduled for completion in 2010.

It is expected to generate 12,000 jobs and bring in more than 300 million USD per year from exports after three years of operation.

This will be Sanyo’s third factory in Vietnam , following its first to manufacture home electric appliances in the northern region and the second to produce digital cameras in the southern region.

The 426ha Quang Chau Industrial Zone, operated by the Kinh Bac Urban Development Joint Stock Company ( Kinh Bac City ), is the country’s leading IZ in attracting hi-tech projects.

Nearly 40 percent of listed firms get top credit rating

Nearly 40 percent of listed firms on Vietnamese stock exchanges are likely to receive the highest mark in creditworthiness for 2007 from the Credit Information Centre.

The centre made the announcement on September 1 to the media in preparation for the actual awards later this month. The ratings, handed out annually, have turned into a reference for investors in securities investment.

In ratings implemented this year, about 117 of 293 listed firms in both the Ho Chi Minh Stock Exchange and Hanoi Securities Trading Centre, excluding credit institutions and investment funds, will receive the highest ranking of “AAA”.

The 170 other firms will be classified as having a “good creditworthiness level” somewhere between “AAA” and “BBB”. The remaining will be marked at an average level.

“Listed firms last year performed better with credit than they did in 2006, evident in the higher number of firms with improved ratings,” said the centre’s deputy director Dao Quang Thong.

Thong also said that enterprises listed in the southern market made up the majority of upgraded firms, compared to the HASTC’s listed companies.

“In business sectors, firms dealing in trading typically were ranked at the highest level AAA, followed by firms in consumer goods production and firms working in construction and property,” added Thong.

The Credit Information Centre, a partner of the global leading creditworthiness rating corporation Dun&Bradstreet, began ranking listed firms in Vietnamese stock market in 2007, and also introduced a guide to assess listed companies.

The centre evaluates companies’ credibility based on three criterion systems, including Sate-audited financial reports, banking loans and non-financial services.

Based on these areas, the centre assigns a grade ranging from “AAA” to the lowest rating “C”.

Over 12,000 foreigners get securities trading codes

Vietnam Securities Depository Centre has granted 12,100 securities trading codes to foreigners, including 806 institutions and 11,294 individuals.

In August alone, 261 foreign traders joined the local stock exchange, including 35 institutional and 226 individual investors.

ACB to pay 55 percent dividend on 2007 earnings

Asian Commercial Bank will pay dividends for 2007’s earnings to stockholders at a rate of 55 percent.
The payment is expected in October.

The bank will also raise its charter capital from 2.63 trillion VND (159.4 million USD) to 5.81 trillion VND in late 2008.

ACB shares closed up 6.96 percent to 98,400 VND on September 3.

Ho Chi Minh City: Crocodile exports skyrocketing

Fishing crocodiles for fun at Saigon Crocodile Village in District 12.
CITES-licensed businesses in Ho Chi Minh City exported 9,900 live crocodiles in the first eight months of 2008, tripling the figure of the same period last year, according to the city’s Department of Forest Rangers.

The businesses also shipped abroad 11,000 sets of crocodile skin in the period, earning a total of 3 million USD.

Major markets for crocodile export were Japan, Singapore, France, Thailand, the Republic of Korea and China.

Apart from skin, crocodile fillet and dried meat are also available for foreign and domestic consumption. Some local shops have been opened to sell souvenirs made from crocodile skin, claws and teeth.

Ho Chi Minh City currently has four businesses licensed by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) to export crocodiles.

Work starts on new project in Hai Phong

Bulldozers started breaking ground on a 300 million USD real estate project in Kien An district in the northern port city of Hai Phong early this week.

According to the project investors, Huadi Investment Firm, construction of the project will be done in three stages, to be completed by 2011.

The project will cover 300,000sq.m and comprise a trade centre and 17 buildings boasting 16-18 floors, and thousands of 90-145 sq.m apartments.

The investors used Chinese company Huadi Company for the planning phase, and US-based DND Company to design the project.

Huadi Investment Firm, a joint venture between Huadi International Group and Vietnamese company CDI, have a 300 million USD budget to complete the project.

Huadi Investment Co Ltd’s first property project in Vietnam underlines its ambitious plan to tap into the real estate market. “Growing numbers of developers are waking up to Hai Phong’s potential as our investment destination, as the city has developed rapidly”, said Linbai, the firm’s strategy supervisor.

Hai Phong, close to Hanoi and Quang Ninh, occupies a strategic location in the country’s northern economic triangle. In addition, Hai Phong is an attractive destination for industrial projects. Therefore, there will be great demand for residential properties, especially luxury apartments, said Linbai.

At the end of July, Hai Phong attracted 294 foreign investment projects with registered capital of 2.9 billion USD.

Cut requested on animal feed materials import tax

The Animal Husbandry Department has asked the Government to continue the import tax cut on raw materials for animal fed processing in a proposal at the Conference on Poultry and Livestock Disease Prevention this month.

The proposal aims to solve difficulties for farmers following 20 to 50 percent increases in the price of raw materials in recent months, which led to a 30-50 percent surge in the list price of feed.

Additionally, the department requested the Government regulate the ceiling price of raw materials in each period. To create favourable lending conditions for the importers of feed ingredients, the Government should also guide the commercial banks and credit organisations, according to the Ministry of Agriculture and Rural Development.

In the second half of the year, domestic enterprises will need about 26 trillion VND (1.57 billion USD) to import materials for feed production, forecast the ministry.

Recently, the Ministry of Finance signed a decision to cut the import tax on some kinds of materials, including whey and whey powder.

Taxes of these materials have been reduced from 10 percent to 2 percent and the soybean tariff has been lowered from 2 percent to zero.

Vietnam’s enterprises are now being forced to import many materials for animal feed because of a shortage of domestic supplies.

In the first six months of the year, the materials’ import value reached 1.52 billion USD, a year-on-year increase of 150 percent.

Hoang Kim Giao, the director of the department, said growth in animal husbandry was only a weak 0.03 percent in the first half of the year.

Demand for these products is expected to increase to 8 percent in the next 10 years.

Da Nang city attracts 23 investment projects in eight months

Central coastal Da Nang city attracted 23 new investment projects totalling 986.5 million USD in the first eight months of the year.

Of the amount, more than 614 million USD came from 18 foreign direct investment projects. British Virgin Islands was the largest investor with two projects capitalised at 330 million USD.

Most of the newly-licensed projects involve real estate business and manufacturing electronic components and headphones.

Da Nang city has so far had 90 FDI projects, worth almost 1.2 billion USD in total. The FDI businesses account for one-fourth of the city’s total export revenues and between eight to 10 percent of the city’s budget collection. They play a major role in the city’s industry, tourism-service and seafood processing sectors.

To promote investment, Da Nang will continue to improve its infrastructural facilities, simplify administrative procedures, offer preferential investment policies, and settle remaining hindrances to investors through regular dialogues.

50 deals signed during VN-China technology fair

More than 50 contracts and memorandum of understandings worth over 68.3 billion VND (4.1 million USD) in total were inked during the Vietnam-China Technology and Equipment Fair, which closed in northern border Lang Son province on September 3.

Techmart Lang Son 2008 featured over 300 booths showcasing latest technology, equipment, software solutions and auxiliary products and services from more than 300 Vietnamese and Chinese businesses.

The four-day fair also attracted over 150,000 visitors.

Many seminars on science and technology supporting socio-economic development of border provinces of Vietnam and China were held on the sidelines of the fair. Among those was a seminar on the sustainable development in the Nanning (China)-Hanoi-Quang Ninh-Lang Son Economic Corridor.

Fresh "tra" catfish prices increase sharply

Prices of fresh “tra” catfish have surged in recent days with the first class fish sold at 15,500 VND a kg on September 2 against 14,500 VND available in late August.

Processors are rushing for the fish to meet an increasing demand for exports when markets are expanded to Russia, Ukraine, East Europe and the Middle East.

In August, enterprises in An Giang province, the nation’s biggest producer of the fish, exported almost 25,000 tonnes of products.

As large-sized catfishes are to customers’ liking in Russia, Ukraine and the Middle-East, supply has failed to meet demand. In the last two days, many companies could buy just 70 percent of their need. The Hung Vuong company, for example, was able to purchase just 400 kg of fresh catfish a day against its daily capacity of 700 kg.

Enterprises have offered farmers 16,000 VND per kg and even more for future purchases in fear of dire shortages in the days to come.

Tax department revels in int’l aid for reforms

The State Bank of Vietnam has assigned the Vietnam Industrial and Commercial Bank (Vietinbank) to join in disbursing an international aid worth 85 million USD for modernizing the country’s tax management.

Of the aid, the World Bank funds 80 million USD from its own aid and helped the Japanese Government channel its grant worth 5 million USD into the project.

The memorandum of understanding on the aid was signed by the Vietnamese Government and the WB in March.

In addition to this project, the taxation sector has conducted administrative reforms with assistance from the Japanese International Cooperation Agency (JICA) and the International Finance Corporation (IFC) under two accords signed in July.

JICA will help improve tax staffs’ competence, diversify information campaigns and support tax payers. The project will last for three years till August 2011.

From July, 2008 till late 2010, the tax sector has been receiving assistance from the IFC in streamlining tax procedures for small and medium enterprises.

IFC Director of the Investment Climate Consultancy Agency Richard Stern said efforts to simplify tax policies and procedures will help improve tax management and better understanding of their duties among tax agencies and enterprises, thus reducing loopholes that may lead to corruption.

The Vietnamese Government has approved a programme on tax reforms till 2010, focusing on a shift to a socialist-oriented market economy to ensure sufficient funding for national industrialization and modernization as well as international integration.

VINACHEM set to exploit kalium ore in Laos

The Vietnam National Chemical Corporation (VINACHEM) said it will exploit kalium ore in Laos to make fertilisers for the two countries and export.

A VINACHEM subsidiary - the Vietnam-Laos Chemical and Rock Salt Co. Ltd. – with a charter capital of 30 million USD will officially make its debut on Sept. 5 to carry out the project in the Lao provinces of Khammouane and Savanakhet.

VINACHEM General Director Do Duy Phi, who is also chairman of the newly established company, said that the Lao government previously approved its plan to explore an area of 196.5 for miniral ores following positive results of the first phase performed on only 10

Vietnam now has to import all 600,000 tonnes of kalium ore per annum for its domestic fertiliser and chemical production. The amount is estimated to reach 1.1 million tonnes in 2015.

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BUSINESS IN BRIEF 2/9   2008-09-02

Commercial banks reduce lending interest rates   2008-09-02

Low-cost imported food flooding HCM City   2008-09-02

Catfish prices surge as supply catches down with demand in Delta   2008-09-02

New ground of interest rates taking shape   2008-09-01