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BUSINESS IN BRIEF 11/9   2008-09-11 - VNA

Petrovietnam wins oil contract in Peru

The Petrovietnam Exploration and Production Co. (PVEP) has won a bid to explore and exploit oil in Peruvian territories, Petrovietnam said in a press release issued on September 10.

Block 162 with an area of 4,700 is located in eastern Peru, the press release said, citing the Peru National Petroleum Company (PeruPetro SA)’s announcement.

This will be the second contract that the PVEP signed in Peru. Earlier, the PVEP inked a contract to explore and exploit oil at Block Z47 offshore western Peru.

PVEP is holding 100 percent stake in both contracts.

Peru imports 12 million barrels of oil each year, mainly from Ecuador and Iran. The southern American country aims to become an oil exporter by 2010.

Coffee festival to kick off in December

As many as 150 domestic and foreign businesses will showcase their coffee products at the 2 nd Buon Me Thuot coffee festival to be held in Central Highlands Dak Lak province from December 10-14.

Seminars on sustainable development of the coffee industry, coffee processing and coffee export will be held on this occasion, said the provincial People’s Committee.

A contest to honour outstanding coffee makers and a photo contest on coffee images will also be organised during the event.

Dak Lak presently owns 180,000 ha of coffee, accounting for 35 percent of the nation’s total coffee area. It also makes up 60 percent of the country’s high quality coffee products.

The province plans to reduce the cultivation area to 150,000 ha by 2015 and use intensive farming methods to harvest more than 400,000 tonnes of coffee bean per year.

Insurance market seething thanks to WTO entry

Vietnam’s insurance sector has been more competitive since the country joined the World Trade Organisation (WTO) two years ago, an official has said.

However, Deputy Minister of Industry and Trade Le Danh Vinh said the sector should have its client-caring services further improved in order to make the best use of opportunities and minimise risks brought in by the country’s WTO membership.

At a seminar assessing WTO entry impacts on the insurance sector in Hanoi on September 11, it was reported that non-life insurance and life insurance premiums attained rises of 35 percent and 17 percent, respectively, in the past six months.

According to Secretary General of the Vietnam Insurance Association Phung Dac Loc, local insurers need additional supporting legal foundations to promote new products, including insurance for the poor, to compete with foreign rivals.

The Vietnamese insurance market sees the competition of 31 insurers, including 17 foreign businesses, which are offering a total of 800 non-life and life insurance products for life, asset and responsibility.

Thermo-power plants planned for islands

The Vietnam National Coal-Mineral Industries Group (Vinacomin) is asking for the Government’s permission to build two coal-fueled power plants on Phu Quoc and Ly Son islands.

The 5-MW station on Ly Son island of central Quang Ngai province will use domestically-tapped coal, while the 100-MW plant on Phu Quoc Island , Mekong delta Kien Giang province, will be fed with coal imported from Malaysia.

Both plants are scheduled for completion by 2011 if the projects are accepted.

Vinacomin said the new plant is expected to help Phu Quoc island, which now relies on four diesel turbines with a combined capacity of only 12 MW, to further boost its marine-based economy and tourism.

Meanwhile, electricity supply in Ly Son comes from the only 2.5 MW diesel turbine. The island is pinning hope on a 2.5 MW wind-power project of Germany which may start operation by the end of this year.

Ethanol-blended petrol to be on sale in Hanoi

The Petrolchemical and Bio Fuel Joint Stock Company (PVB) said it will sell E5 ethanol blend petrol on a trial basis next week at two petrol stations in Hanoi .

The mixed petrol, with five percent of ethanol is priced slightly lower than conventional petrol types.

PVB General Director Vu Thanh Ha said that motor vehicles running on E5 ethanol-blended fuel can cut their fuel consumption by 2-3 percent and carbon dioxide emissions by 60-70 percent compared with normal petrol.

Several members of the Hanoi Taxi Association will use the imported bio-petrol in the trial period.

PVB has invested 80 million USD in building an ethanol production plant and developing a cassava and sugar cane growing zone in northern mountainous Phu Tho province to supply materials for the plan, which has an annual capacity of 100,000 cu.m and is expected to be completed by the end of this year. The company hopes to produce ethanol blend petrol by 2010.

Another plant, which will be built by the Vietnam Oil and Gas Corporation in central coastal Binh Dinh province, is expected to be operational one year after the plant in Phu Tho province. The two plants will consume around 400,000 tonnes of dried cassava each year.

However, Dr. Bui Van Ga, an experienced researcher on alternative fuels warned that Vietnam should ensure food security while seeking to increase the use of biofuel.

At present, more than 50 countries and territories worldwide are using bio-fuels. Seventy-five percent of 50 billion litres of ethanol produced in the world in 2006 were used as fuel.

Blue chips continue downward spiral

Significant purchases of blue chips occurred at the beginning of Sept. 10 session which made the VN-Index fall by 2.10 percent to close at 514.45 points.

Some blue chips on Sept. 10 recorded a bounce, including PetroVietnam Drilling (PVD), Kinh Do Corporation (KDC), and Vietnam Dairy Products – Vinamilk (VNM).

”Substantial purchase of big stocks at the beginning of Sept.10 session contributed to their rebounding. It also turned a potential crash of the VN-Index into a slight decline,” said broker Nguyen Hoang Hai at An Binh Securities.

Hai also said that a massive sale of big stocks mid-session swept away all attempt to warm up large stocks.

”As a result, most blue chips continued to slip and the VN-Index stayed down,” Hai added.

Blue chips that suffered the biggest losses included Imexpharm Pharmaceuticals (IMP), Binh Dinh Minerals (BMC), and Financing and Promoting Technology (FPT).

In the market as a whole, 26.15 million shares changed hands, generating a turnover of 860.89 billion VND (52.18 million USD).

In the Hanoi Securities Trading Centre, the HASTC-Index made a consecutive downturn on Sept. 10, slipping 0.94 percent to 175.19 points. The centre saw 12.99 million shares transacted on the day with a total revenue of 540.88 billion VND (32.78 million USD).

Gov’t stresses environment issues in oil sector planning

Deputy Prime Minister Hoang Trung Hai has requested the oil and gas sector to focus on the environment issue and energy saving and security in its development master plan for 2006-2015 and visions towards 2025.

During a meeting on the issue on September 10, Deputy PM Hai also said the plan should include detailed steps at every development stage of the sector in order to define clearly the country’s ability for self-sufficiency in energy.

The draft master plan, which has been circulated among relevant ministries and sectors for recommendations, forecasts that Vietnam ’s demand for oil and petrol products will grow by an annual 8-10 percent until 2010.

It calls for acceleration of oil and gas exploration and exploitation activities and stronger cooperation with foreign partners in the targeted period.

Electricity industry expected to generate 18,000 MW in 2009

Vietnam has to raise its total electricity generation capacity to 18,000 MW in 2009 to meet fast growing demands, said Minister of Industry and Trade Vu Huy Hoang.

To reach this goal, the Electricity of Vietnam (EVN) needs to speed up the construction of power plants, Hoang said at a working session with the group on September 10.

The sector must meet essential needs of production and living, and ensure the electricity quality and safety, he said, adding that the EVN should work out a suitable maintenance schedule for power plants to avoid the suspension of many major plants at the same time.

Northern Vietnam is forecast to lack some 200 million kWh of electricity during the dry season of 2009.

Paper projects kick off to cool down shortage

The Tan Mai paper joint stock Company has been given the go-ahead to kick off four paper and paper pulp production projects in a move to meet the growing demand of the market.

The company, one of the country’s largest paper producers, has received licence to invest 3 trillion VND (176 million USD) in building a paper plant in Long Thanh district, southern Dong Nai province.

Once fully operational, the plant will be capable of producing 150,000 tonnes of newsprint per year.

Central Quang Ngai province has also given the nod to the Tan Mai Company to build a plant specialising in producing paper and paper pulp with a total investment capital of 199 million USD.

The 44ha plant, scheduled to be built by 2011, will produce 130,000 tonnes of paper pulp and 200,000 tonnes of high-quality printing paper, annually.

The mill is expected to tap the province’s rich raw materials, shift the local forestry industry into production and offer employment to thousands of local workers, said provincial People’s Committee Chairman Nguyen Xuan Hue.

Central Highlands Lam Dong provincial People’s Committee has licensed the Tan Mai Company to build a paper pulp plant with a capacity of 200,000 tonnes per year.

The factory will be constructed between 2008 and 2010 in the Da Oai industrial zone in Da Huoai district at an estimated cost of 600 billion VND.

The company also plans to construct a plant in the Central Highlands with an annual capacity of 130,000 tonnes of paper pulp and 200,000 tonnes of paper.

Demand for paper in 2008is predicted to see a 24 percent year-on-year increase, to reach more than 2.2 million tonnes, with newsprint and writing paper seeing a growth of 49 percent, according to the Vietnam Pulp and Paper Association (VPPA).

According to director general of the Tan Mai Company Tran Duc Thinh, the company’s investment falls in line with the paper industry’s development plan through 2010, which was approved by the Ministry of Industry and Trade last year.

Once fully operational, these projects will help fulfill the sector’s target of producing 1.38 million tonnes of paper and 600,000 tonnes of paper pulp per year by 2010. The figure is expected to increase to 3.6 million and 1.8 million by 2020, respectively.

Ben Tre clam to receive MSC certificate

Southern Ben Tre province is likely to receive certification from Marine Stewardship Council (MSC) for sustainable exploitation of clams at its three coastal districts of Binh Dai, Ba Tri and Thanh Phu.

Ben Tre clams have basically met all the conditions and criteria to receive MSC certificate, said the director of MSC’s certification body, Moody Marine Ltd, after its experts conducted the final assessment of Ben Tre clam fishery.

Farmers in the three coastal districts harvest thousands of tonnes of clam meat per year. The MSC certificate is expected to facilitate the export of this sea food specialty.

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