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Viet Nam tops Japanese production survey

VNECONOMY updated: 31/05/2007


Viet Nam was forecast to have the best production base in South East Asia for the next 5-10 years by more than 75 percent of Japanese manufactures currently operating in the country, according to a survey by the Japan External Trade Organisation (JETRO).

The 2006 survey, conducted on over 1,330 Japanese manufacturers operating in 11 Asian countries and territories, was released by JETRO on May 30.

Highlighting the country's ability to attract and satiate Japanese investors is the fact that Viet Nam achieved the highest results yet scored by a manufacturing country since the survey has been released.

Viet Nam came in second to India in Asia and was rated the highest among ASEAN countries where Japanese manufacturers expect to reap higher profits for the 2007 year.

The survey also revealed that 82.4 percent of Japanese manufacturers in the country were planning to expand their businesses operations in Viet Nam, in comparison to the regional average of 58.2 percent.

Industrial production up 16.8 percent in five months
VNECONOMY updated: 30/05/2007


Falling inline with Viet Nam's rapidly expanding economy, industrial production value for the first five months of the year surged to nearly 225.78 trillion VND (14.1 billion USD), a year-on-year increase of 16.8 percent.

The non-State sector led the charge by posting growth of 20.4 percent, followed by the foreign-invested sector with 19.3 percent, the Ministry of Industry reported.

The State-owned sector lagged behind, recording a more modest increase of 7.9 percent.

May alone saw industrial production value registered at around 48.68 trillion VND (3 billion USD), a surge of 2.7 percent over the previous month.

Market experts have pointed to successes in the industries of steel, electric engines, machine tools, electric fans, pesticides, plastics, clothes and motorbike and automobile spare parts as key drivers for the increased output.

The Ministry of Industry did however urge the Electricity of Viet Nam (EVN) Group to ensure power is maintained to allow for sufficient supply for production to remain in high gear.

Rule governs State capital flows to SCIC
VNECONOMY updated: 30/05/2007


The Ministry of Finance has issued a circular regulating the transfer of State capital from equitised State-owned enterprises to State Capital Investment Corp (SCIC).

Pursuant to Circular No 47/2007/TT-BTC, issued on May 15, the SCIC will take over State capital from enterprises which were previously independent State-owned enterprises and have since been equitised and reorganised as limited liability companies.

The amount of capital to be transferred to the SCIC will be based on the face value of shares, accrued earnings of the State in the enterprises, and actual capital contributions made by the State.

Ministries and local People’s Committees which have granted licences to enterprises to reorganise or equitise, as well as all enterprises making IPOs, must report to SCIC.

If enterprises do not make a timely transfer of State capital to the SCIC, they can face fines and be held reponsible for any diminishment of capital.

SCIC has responsibility for the management of State capital. It has the authority to compel enterprises to turn over funds due to the State, as well as dividends.

Quarterly, or on order of the Ministry of Finance, SCIC is also required to report activity involving transfers of State and on securities listings by equitised enterprises

Viet Nam targets 500,000 non-State enterprises by 2010
VNECONOMY updated: 30/05/2007





Measures to push development of non-State enterprises were discussed in Ho Chi Minh City on May 28, targetting 500,000 starts-up across the country by 2010.

To this end, participants proposed the government continue its tax reform in a fair and transparent manner and improve administrative procedures towards the "one-stop shop" policy.

Attention should also be placed on logistic services relating to legal and tax procedures, said delegates, adding that more government support in human resources training, information supply and legal assistance for businesses are also needed.

Viet Nam is currently home to 260,000 non-State businesses with a total capital of close to 600 trillion VND.

In 2006, capital investment from domestic private enterprises amounted to 132 trillion VND, doubling that of foreign investors.

The development of private enterprises, particularly in processing, retail and services industries, helps generate more than 90 percent of jobs for local workers each year.

EVN to raise capital via new subsidiaries

VNECONOMY updated: 31/05/2007


State-utility Electricity of Viet Nam Group (EVN) will create 10 joint stock companies this year in a move to raise capital for the construction of Government-approved energy projects.

The Director of EVN’s Equitisation and Securities Division, Dang Phan Tuong, said with an investment of over 30 trillion VND (1.8 billion USD), EVN will be the dominant shareholder in the 10 companies.

Eight of the companies will be responsible for building and operating eight hydro and thermo-electric power plants, namely: the Song Tranh, Song Bung 2, Song Ba Ha, Huoi Quang, Ban Chat, Ban Ve, Se San 4 and Lai Chau.

The two remaining subsidiaries will be dedicated to the Lao and Cambodian markets.

Tuong said in the first phase of the plan, EVN will seek strategic investors among the other State-owned enterprises and foreign companies to take major stakes in the 10 companies.

In the second phase, the 10 subsidiaries will hold initial public offerings to mobilise additional capital.

The companies will also be allowed to conduct business outside the energy industry, Tuong said.

EVN is currently the majority shareholder of five other joint stock companies spe******ing in the construction of electricity works.

Analysts have voiced support of EVN’s decision to set up new companies and equitise in order to mobilise capital, instead of relying simply on loans. It also gives investors an opportunity to partake in the country’s lucrative energy industry, said analysts.

Northern energy firm begins building plant
VNECONOMY updated: 30/05/2007


Quang Ninh Thermoelectric Joint Stock Co yesterday broke ground on the VND9.3-trillion (US$582.8-million) Quang Ninh Thermoelectric Plant No 2 in the city of Ha Long.

The new plant has a design capacity of 600MW and is expected to be operational by the end of 2009, producing about 3.6 billion kWh a year.

The Quang Ninh 2 Plant, covering 400ha, will supply electricity to the Hai Phong-Ha Noi-Quang Ninh economic triangle.

Executives forecast that the company’s two power plants, Quang Ninh 1 and 2, will provide enough electricity for northern Viet Nam, with a total capacity of 1,200MW.

Quang Ninh Thermoelectric - which is owned jointly by State-owned Electricity of Viet Nam Group, Vinacomin and Vinaconex - is the primary investor in the new plant.

Shanghai Electricity Corp has been contracted to design and build the facility.

PetroVietnam orders deep-sea rig

VNECONOMY updated: 30/05/2007


A subsidiary of State owned oil giant PetroVietnam has signed an agreement with Singapore-based Keppel Fels, to purchase a deep-sea oilrig capable of drilling to 9,000m.

PetroVietnam Drilling Investment Corporation came to terms on the 191 million USD jack-up rig that can operate in water depths of up to 114m, on May 28.

Previously, Keppel Fels supplied another PetroVietnam subsidiary, the PetroVietnam Drilling and Well Service Company, with a similar rig that is now being used in the offshore Te Giac Do (Red Rhino) field in the southern coastal province of Vung Tau.

Keppel Fels is a wholly owned subsidiary of the Keppel Offshore & Marine Corporation, one of the world’s leading designers and builders of jack-up rigs.

Completion of the oil rig is scheduled for October, 2009.

Viet Nam Steel joins up with India’s Tata

VNECONOMY updated: 30/05/2007


The State-owned Viet Nam Steel Corp (VSC) will team up with India’s global juggernaut Tata Steel Corp to build a new plant in central Ha Tinh province.

The companies will sign a memorandum of understanding to this effect on May 29, said Trinh Khoi Nguyen, a VSC representative.

According to a preliminary feasibility study, the project will cost 3-3.5 billion USD and will be able to churn out 4.5 million tonnes of steel products a year. The mill will be located in Ha Tinh’s Vung Ang Industrial Zone, and use iron ore from the Thach Khe mine.

VSC and Tata will soon conduct a full feasibility study and prepare conditions for construction.

”A joint venture will be established if the results from the feasibility study are positive,” said Nguyen.

VSC chose Tata among a pool of potential partners that bid for the project.

The Tata Group over the past few years has sought investment opportunities around the world, including Viet Nam’s oil industry, said Prabhat Sharma, a Tata spokesman

Crude oil lubricates export revenue growth
VNECONOMY updated: 28/05/2007


Crude oil exports raked in over 3 billion USD during the first five months of the year, recording the largest single industry export revenues in the country, according to the General Statistics Office.

In total Viet Nam earned over 18 billion USD in export turnover, a year-on-year increase of 18.4 percent with high values coming in from garments and textiles, 2.7 billion USD, and footwear, seafood and coffee, that all accounted for over 1 billion USD each.

Highflying exports of wood products surged to 947 million USD and computer and electronic components also spiked at 744 million USD. Pundits forecast both of these industries to earn over 1 billion USD in the next few months.

Rice at 610 million USD and rubber, 415 million USD, rounded out the top earners.

Import value for the first five months of the year also increased by 27 percent on the back of a red-hot economy and increased consumer demand leading to a trade deficit of 3.3 billion USD.

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