Property trade stagnant in southern provinces

Many property segments in Can Tho City and Binh Duong Province have been hit by stagnation since early this year, according to Savills Vietnam’s latest market research.

An apartment in Binh Duong has gone for an average of US$800 per square meter, up 4%, while that of an adjoining house or villa has risen 67% to US$2,075 per square meter. However, land price has remained unchanged from the first quarter, at US$159 per square meter.

The primary market in Binh Duong has had an average absorption rate of 32%, dropping 14 percentage points from the previous quarter, according to Savills.

Some 16 projects will enter the property market in this province with around 5,600 houses and land lots in all segments, with apartments accounting for 79% in 10 projects. Most of them are located in Thu Dau Mot Town, Binh Duong New City, and Thuan An, Di An and Ben Cat districts.

Infrastructure projects which are being developed such as National Highway 13, My Phuoc-Tan Van Expressway, HCMC-Chon Thanh Expressway, and belt roads No.3 and No.4 will facilitate transportation from other provinces to Binh Duong.

Meanwhile, both the primary and secondary markets in Can Tho City have 35 existing projects with over 23,500 houses and land lots. Cai Rang District has the most property projects as it is near the Can Tho Bridge and South Can Tho Urban Zone.

The primary market in the city has expanded slowly with an apartment and an adjoining house or villa priced at US$565 and US$600 per square meter respectively, up 13% and 16% down from the first quarter, said Savills.

Can Tho is estimated to have about 5,100 houses and land lots in the near future. However, 47% of projects are still on paper due to site clearance problems.
 
Mercedes-Benz expands fleet customers

Besides achievements in attracting individual customers, Mercedes-Benz Vietnam (MBV) has been very successful with its fleet business in Vietnam. The manufacturer of luxury vehicles has gained numerous deals for supplying fleets of cars to five-star hotels, luxury resorts, and large corporate groups, and is targeting schools and education organizations these days. MBV says schools and educational organizations are potential fleet customers that it can offer complete packages in terms of special pricing, financial solutions, regeneration of used fleets, long-term rental, insurance and service solutions, among others.

The company’s efforts are paying off well. Last month alone, MBV handed over two big fleets to Singapore International School and InterContinental Hanoi Westlake with the combined value of more than VND15 billion.

For Singapore International School, a trademark of KinderWorld Education Group, MBV together with its authorized dealer Vietnam Star last week handed over a fleet of Sprinter minibuses. The fleet, worth over VND6 billion and including seven Sprinter minibuses, will be used as school buses both in HCMC and Hanoi.

The fleet to KinderWorld is the new generation 16-seat Sprinter 311 which is said to be the best and the safest mini-bus in Vietnam, according to the company. The new mini-bus, exclusively in the segment, is equipped with “Electronic Stability Program” safety function, in addition to the entertainment system CD/MP3/Radio with the latest-updated USB connection for easier music access.

According to Carol Tan, executive director of KinderWorld Education Group, which has 15 campuses across Vietnam, the purchase of new Sprinter minibuses from Mercedes-Benz is to upgrade the school logistic resources in order to better cater to their students for the new school year and meet the increasing enrollments at their campuses.

Dr. Udo Loersch, general director of Mercedes-Benz Vietnam, said: “Together with luxury hotels and corporate customers, schools and education organizations are also our valuable fleet customers that we would like to focus on with our exclusive 360 degree solution. Sprinter is the only mini-bus with Electronic Stability Program (ESP) in the segment, offering students and kids the best comfortable seating with highest safety on the road and meeting the standards of premier schools from KinderWorld.”

The 360 degree solution for fleet customers mentioned above by the automaker’s CEO includes Techcombank finance support, Liberty insurance and comprehensive after-sale care. This solution package helps enhance the reliability of the Mercedes-Benz car that offers premium service not only for VIP guest transportation and commercial but also proves itself as the social safety vehicle with environmental responsibility.  

Besides the deal to supply 16-seat minibuses to KinderWorld, MBV last month together with its authorized dealer Vietnam Star Hanoi also handed over a fleet of four premium E-class saloons worth over US$400,000 to InterContinental Hanoi Westlake. With this top fleet including four latest-generation E300 Elegance managed by Red River Company, InterContinental Hanoi Westlake is among the pioneers in the hospitality industry in the north to have the best and the biggest number of top luxury Mercedes-Benz business saloons for their high-class transportation service.

With the new fleet, InterContinental Hanoi Westlake introduces the new conveyance service as a complimentary amenity to guests staying at the hotel. Mercedes-Benz premium saloons are used not only to enhance the VIP experience, but also reflect the legendary charming accommodations, facilities and attentive hospitality of the lakeside five-star hotel.

The Inter-Continental Hanoi Westlake has been a loyal customer of Mercedes-Benz so far. Before this fleet, the hotel was using the previous generation E-Class E280 for several years.

“We are proud to continue to raise the benchmark of Hanoi’s hospitality services and are now being able to offer all our guests the in-car hot-spot which certainly will enhance the InterContinental Hanoi Westlake experience,” said Adam McDonald, general manager of InterContinental Hanoi Westlake.

Dr. Loersch said that the new generation top business sedan E-Class would definitely continue to reinforce the top position of the hotel in the hospitality industry in Vietnam. Especially, all the four Mercedes-Benz E-Class sedans of InterContinental Hanoi Westlake are installed with in-car Hotspot, which makes it available for passengers to use internet and email wirelessly and fast on the road, according to MBV.

The E-Class is the top luxury saloon meeting high-level requirements of InterContinental Hanoi Westlake. It comes with state-of-the-art safety assistance systems and convenience equipments, such as attention assist, parking guidance, adaptive high-beam assist, thermotronic, rear-seat entertainment system, and panoramic sunroof.

According to MBV, 80% of 5-star hotels in Vietnam use premium three-pointed star saloons and vans for VIP guest transportation, such as InterContinental, Park Hyatt, Caravelle, Sofitel, New World, Windsor, and Vinpearl Luxury, among others.

Many transportation companies also utilize Mercedes vehicles to do business, such as DHL and Fedex with big fleets of Sprinter Panel Van for cargo delivery, and Toan Thang or Hoa Mai as passenger transportation enterprises with a fleet of nearly 100 units of the mini-bus Sprinter.

In the commercial sphere, Trung Nguyen asserts its ranking when buying a super sport car SLS AMG for their nationwide marketing campaigns. The company also owns mobile coffee selling vans customized from Sprinter Panel Van.

Regarding the 360 degree solution, MBV says corporate owners also enjoy other comprehensive services including 24h emergency service, genuine part installment, full warranty policy, maintenance package and courtesy cars as well as nationwide sales and service network.

The company in the first eight months achieved total sales volume of 1,725 units, including 1,300 passenger cars, a year-on-year increase of 27%.
 
Marriott to run 5-star hotel in Danang City

The U.S.-based Marriott International Inc., a world leader in hotel management, signed a contract with Dong A Real Estate Co. to manage the five-star Renaissance Hotel Danang, which will be opened in three years’ time.

The 282-room hotel is part of a complex named Golden Square, which covers 10,664 square meters and is surrounded by Pham Hong Thai, Nguyen Thai Hoc, Yen Bai and Nguyen Chi Thanh streets in the center of Danang City. The complex is being developed by Dong A Real Estate.

Marriott will directly manage the hotel when it is put into service in late 2014.
 
HBC reports profit despite tough times

Hoa Binh Construction & Real Estate Corporation (HBC) managed to make some profit in the first half of the year though most others in the real estate industry are struggling with poor performance.

The firm obtained total revenue of VND1,326 billion in January-June, up by a whopping 78% year-on-year, and after-tax profit of VND68.7 billion, up 30%, according to the company’s consolidate financial report which was audited by Ernst & Young.

Though it has been hard to gain access to bank loans due to high interest rates, HBC has been able to secure loans at a number of lender banks such as BIDV, Vietinbank and Standard Chartered.

HBC is working on 46 projects nationwide.

Its 2011 revenue is estimated to amount to a total of VND2,500 billion, up 41.45 % from last year, and its after-tax profit VND150 billion.

The corporation recently joined hands with Saigon Construction Consultant and Real Estate Business Joint Stock Company (Rescon) to open their first real estate trading floor in the city.
 
BIDV cuts lending rate to 18%

Bank for Investment and Development of Vietnam (BIDV) said they would lower the borrowing interest rate to 18% for short-term loans and to 19% for long-term ones in Vietnam dong from Tuesday.

The rates are 1.5-2 percentage points lower than the current ones at around 20% per year.

The bank will also earmark VND10 trillion for short-term loans for small and medium enterprises in sectors of agriculture and seafood export and manufacturing, and offer a lower rate at 15-17.5% per year for corporate clients using its package service.

Securities and property trade sectors, however, will still be subject to higher rates, at 19% and 19.5% per year for short-term and medium- and long-term loans respectively.

For foreign currency loans, clients are offered a rate of 6-7% per year. The bank said they would also control this year’s credit growth at less than 19%

The credit growth has slowed recently due to Vietnam dong’s high interest rate. Therefore, the central bank seeks to cut the interest rates of dong, prompting many banks to cut rates for certain corporate clients.

Meanwhile, Saigon – Hanoi Bank (SHB) has launched a program offering a low interest rate for firms operating in agriculture with short-term loans disbursed from late August until the year’s end. Besides, the bank has set aside a sum of VND2 trillion to make soft loans at 17-18% to clients in fisheries and farm produce sectors.

Asia Commercial Bank (ACB) and Vietnam Export Import Commercial Bank (Eximbank) had previously offered low rates for certain individual and corporate clients.
 
SBV: Banks’ profit growth acceptable

In response to public queries on banks’ high profit growth in the year’s first half despite the current economic distress, the State Bank of Vietnam (SBV) said earnings growth in the banking system were acceptable.

According to figures shown by the central bank’s inspectors, the difference between revenues and expenditures, not essentially profit, of the banking system rose by 42% in the first six months from the same period last year.

However, the growth was of different levels among banks. Some small banks saw minus growth rates while the big ones achieved good results.

Considering the correlation between the banks’ earnings and their asset and equity size, SBV said the 42% revenue growth was equivalent to the growth of total asset and equity of the credit institutions, which are 39% and 44% respectively.

Therefore, although the absolute number of revenue is higher than in 2010, the important figures to assess the banks’ operational efficiency and rate of return, namely return on assets (ROA) and return on equity (ROE), remained almost unchanged.

The respective growth rates in ROA and ROE are 0.77% and 8.1%, similar to the 0.75% and 8.2% posted in the same period last year but lower than the whole year 2010, being 0.9% and 10.3% respectively. Meanwhile, ROE in the Southeast Asia region has increased by 14-15% and the world up by 17%.

In comparison with other economic sectors, banks have their ROE ranked 11th out of 21 sectors and the lowest ranked ROA. Consequently, despite the high growth in total revenue, the bank stocks remained unattractive to investors.

The SBV inspectors reported that the difference between revenues and expenses as of end-June had not reflected all expenditures. Under SBV regulations, banks did not include their risk provisions in their total costs.

According to SBV, these risk provisions must be huge due to the increasing bad debts. Moreover, the estimated revenues and costs along with other provisions were also not included in the banks’ financial statements.

Also, under the current regulations, debt classification and risk provisions are limited within lending operations, while other assets with potential risks like corporate bond investment are not yet categorized and given risk provisions.

Besides, the difference between revenues and expenses in the first six months has not been independently audited. If all expenses are calculated sufficiently and accurately, many banks will have their net revenues lower than announced.
 
Issuer of ‘welfare card’ sets up company in Vietnam

French-based Sodexo Group known for its ‘welfare cards’ services has just upgraded its representative office into a full-service company, pinning high hopes on a market where people are being more adaptive to non-cash transactions.

Sodexo Pass Vietnam, as the French group’s subsidiary is named, announced at a function held in HCMC last week that initially it would issue Meal Pass and Gift Pass, entitling card holders to easy meals and gifts on the basis of payment in advance.

Dao The Hai, director of the company, said these are parts of what it calls welfare cards in Vietnam aimed at bringing better convenience for consumers.

On this occasion, Sodexo Pass Vietnam also signed agreements with the Maximark supermarket chain to accept both Meal Pass and Gift Pass vouchers, with the Fahasa bookstore chain to accept Gift Pass vouchers, and with the Long Monaco food chain to accept Meal Pass vouchers.

The French group received the license to open its affiliate in Vietnam after four years operating a representative office in the country.
 
More local ships detained abroad

Vietnam saw more sea-going ships detained abroad in the first eight months of the year, show statistics by Vietnam Register.

In the year to end-August, 58 Vietnamese-flagged vessels were detained by foreign governments, up from the 36 vessels recorded the same period last year. In July and August alone, there were 16 ship detentions by foreign nations.

Most of the ships are under detention in China and Indonesia. In January-July, China and Indonesia detained 23 and 12 vessels from Vietnam respectively.

The detained vessels do not meet the overseas safety, security and environment protection standards, said Nguyen Vu Hai, deputy head of Vietnam Register. Upon arrival at foreign ports, they were detained and forced to fix their deficiencies.

Vietnamese-flagged vessels are seldom checked and upgraded by ship owners due in part to financial constraints, Hai said. The ship detentions have caused financial damages to ship owners but also done harm to the reputation of the country’s ship fleet in foreign countries.   

Hai suggested domestic ship owners must keep routine maintenance for their ships in line with international standards. On the part of Vietnam Register, he said, it will increase inspections of ships, especially those having their safety registrations expiring soon.

Two e-commerce service providers get merged

Internet shopping company Nhommua and the mapping service firm Diadiem on Wednesday announced to merge with one another alongside their two online websites of www.nhommua.com and www.diadiem.comt to start up MJ Group as a new e-commerce firm.

MJ Group from now has four subsidiaries including Nhommua, Diadiem, mobile applications provider two.vn and digital services provider Two Media.

The merger will help the group take advantage of existing infrastructures of the two firms and save expenses, said Tom Tran, chief executive officer of MJ Group.

At the function to announce the merger on Wednesday, MJ Group also struck deals with IDG Ventures Vietnam, Germany-based Rebate Networks GmbH Co., and Russia-based Ru-Net Limited to sell stakes worth US$60 million to the three investors.

Tom said the investment duration lasted five years but refused to reveal the specific stakes transferred to each of the investors. Investments are planned for developing new online services for customers, creating jobs for over 1,000 people in 2012.

This is the first investment of Ru-net Limited in Vietnam as well as in Asia while Rebate Networks GmbH used to invest in Nhommua in 2010.

Leonid Boguslavsky from Ru-net Limited said the company planned to invest more in Vietnam in the future, especially in e-commerce and entertainment sectors.
 
Red River delta draws most FDI

The Song Hong (Red River) Delta region took the lead in attracting foreign direct investment (FDI) in the first eight months of this year, according to the Ministry of Planning and Investment's Foreign Investment Agency.

Over US$4 billion in FDI was poured into the region, accounting for 42.6 per cent of the total investment registered in the country. The Southeastern region ranked second, receiving $3.77 billion or 39.4 per cent of the period's total registered investment.

Meanwhile, the Cuu Long (Mekong) Delta region attracted only $126 million, just above the Central Highlands, which saw the lowest level of foreign investment among six regions in the country, the agency noted.

The region's unsatisfactory performance can be attributed to poor overall strategies to attract investment. This has resulted in unhealthy competition among the provinces and a lack of co-ordinated investment promotion, said Tran Huu Hiep from the South-western Region Steering Committee.

Insufficient infrastructure facilities and a shortage of skilled workers were also major challenges to attracting investment, Hiep said.

He called for closer co-operation among provinces to effectively exploit the region's advantages, especially in infrastructure and agriculture. He also urged provincial authorities to take steps to improve labour resources.

The committee plans to join hands with the Cuu Long Delta Rice Research Institute and 13 provinces and cities in the region to develop a co-operative programme on farm produce, seafood production and human resource training.

Furthermore, the 2011 Cuu Long (Mekong) Delta Economic Co-operation Forum (MDEC) would be held next month in Ca Mau City to work out effective measures to boost regional economic connectivity, Hiep said.

Participants plan to discuss ways to develop a regional linkage mechanism, a trade-tourism-investment promotion plan towards 2015 and a co-operative strategy between the region and other areas inside the country as well as foreign establishments.

Local firms put social insurance dues at banks

HCMC Social Insurance agency has said over 24,000 enterprises in HCMC have delayed paying social insurance premiums worth VND750 billion since early this year and deposited this amount at banks to enjoy high interest rates.

Nguyen Dang Tien, deputy director of the agency, said firms had not paid social insurance deliberately or delayed the payments because the interest on this due was only 10.5% per year. Meanwhile, if those premiums were deposited at banks, those businesses could be offered far higher rates, at 18-19% per year.

The delay in insurance premium payment is partly caused by mild penalties with the heaviest fine being about VND30 million, which is trivial compared to the huge interest earned from bank deposits, Tien said.

The city now has over 80,000 corporate taxpayers but only one half pay social insurance for their staff, Tien said, adding some enterprises, especially small and medium, just paid social insurance for those holding senior positions.

Some firms have even attracted employees by offering high salaries by using the amount of money which should have been used for social insurance payment. This can be seen as an act of unfair competition for labor.

Social insurance payments would also be affected by the new minimum wage rule, effective in October, as more firms, particularly those in financial distress, would try to evade or delay social insurance payments.

Social Insurance agency in HCMC has filed suits against 66 enterprises owing social insurance premiums since early this year with a total of VND25.5 billion. So far, VND14 billion has been settled. The agency has threatened it will sue more in the future.

Tien said the agency had proposed raising the fine by 5-10% to prevent insurance payment delays.
 
Controversy over auto-parts tax
 
A tax audit conducted by the customs department of northern Vinh Phuc Province recently found Honda Viet Nam in arrears by VND3.34 trillion (US$160 million) over the past five years, sparking a controversy over the heavy burden of import duties on auto parts.

To encourage local content and local production, tax policies have been designed to encourage imports of auto parts rather than sets of parts, and the parts with higher local content levels enjoy lower tax rates.

Late last year, Ministry of Finance Circular No 184/2010/BTC tried to address the issue by providing that spare parts would not be included in calculation of local content under Decision No 05/2005/BKHCN, issued in 2005 by the Ministry of Science and Technology to guide the calculation of localisation ratios.

Circular No 184 stipulates that if at least one part in an imported set of components has a breakdown level lower than that prescribed in Decision No 05, the set would be subject to import tax rates applied to the completely built unit (CBU, or fully-assembled vehicle).

So, if the tax claims against Honda Viet Nam are deemed valid, a number of major automobile assemblers in Viet Nam, such as Toyota, Ford, Vidamco, Vinamotor, and Hyundai will be hit by tax arrears invoices or listed as forced to pay tax in arrears.

For instance, in April of this year, the customs department of northern Hai Duong Province discovered that the breakdown level of Ford Viet Nam's imports was lower than declared, so the tax rate applied to those imports would be the same as that applied to CBUs.

Ford had to temporarily stop operation for several days since it could not obtain a customs declaration for new shipments without accepting an 82-per-cent import duty on the shipments.

The Viet Nam Automobile Manufacturers Association (VAMA) recently sent a document to the Ministry of Finance stating its opinion that Decision No 05 aims to guide a method of determining localisation ratios and is not for the purpose of calculating import duties levied on auto parts.

Truong Hai Auto Joint Stock Co CEO Tran Ba Duong added that Decision No 05 stipulated minimum breakdown levels in line with ASEAN and international standards and was the foundation for determining the local content of finished products.

Deputy Prime Minister Hoang Trung Hai has agreed in principle on a solution to handle import duties on auto parts and has ordered the Ministry of Finance Ministry to amend the Circular No184.

Previously, the Ha Noi Customs Department has sent a document to the General Department of Customs saying, after 10 days of inspecting customs clearance on auto parts imported by Honda Viet Nam, it found that kits of wheels and seats imported by Honda Viet Nam for assembling Honda Civic and CRV models had breakdown levels lower than regulated in Decision No 05. However, the department said it had not yet made any decision to recover back taxes.

Minister of Finance Vuong Dinh Hue recently attributed the problem to the ignorance of auto assemblers, who had failed to pay due attention to ensuring compliance with breakdown levels as regulated in Decision No 05.

He said the ministry had proposed the Goverment a temporary solution, suggesting that imported components failing to meet breakdown levels be taxed as follows: (1) the local content ratio of a component would be regulated by the Ministry of Science and Technology in accordance with the method for determining the percentage of local content for CBUs; and (2) total value of imported parts failing to meet breakdown levels would not be able to exceed 10 per cent of the total value of all components needed to assemble a CBU.
 
GM Vietnam’s new engine for growth

Global automaker General Motors today announced its unit in Vietnam - Vietnam Daewoo Motor Company to change its name to GM Vietnam.

GM Vietnam is also aligning its operations to make Chevrolet itsretail brand.

“The changes represent a new beginning for General Motors in Vietnam in line with our new corporate strategy,” said GM Vietnam managing director Gaurav Gupta. “We look forward to leveraging GM’s unmatched global resources to introduce high-quality new products and services that will enable consumers across the country to enjoy Chevrolet’s award-winning shopping and ownership experience.”

Gupta added: “In addition to benefiting our customers, the changes will benefit our employees, partners and the nation’s economy. This demonstrates the importance of Vietnam to GM and our company’s commitment to growth in this market.”

Vietnam Daewoo Motor Company known as Vidamco was established by the former South Korea’s Daewoo Motor in 1993. The company becamepart of GM in 2002 and currently has nearly 600 employees.

With its manufacturing facility in Hanoi, which began operation in 1995, GM Vietnam has an annual assembly capacity of 20,000 vehicles for sale in Vietnam and for exports. It operates a nationwide sales network with 20 dealers, 22 showrooms and upgraded after-sales service centers in major cities of Hanoi and Ho Chi Minh City.

GM’s sales of Chevrolet products in Vietnam in the firsteight months of 2011 increased 40 per cent year on year. GMVietnam has maintained its second-place position among foreign invested automakers in the country.

Gupta said that GM Vietnam planned to launch multiple new Chevrolet products later this year while it would also upgrading its dealer network, showrooms and service centers to global Chevrolet standards.

Owners of Daewoo products will continue to receive full warranty coverage as well as aftersales service and spare parts throughGM Vietnam and dealer-owned service centers, he said.

Founded in 1911 and named after famous Swiss-born race car driver Louis Chevrolet, Chevrolet is one of GM’s four core brands and its largest brand. Last year, more than 4.25 million Chevrolet vehicles were sold in more than 130 countries around the world. The Chevrolet brand accounts for 53 per cent of GM’s overall sales and is one of the world’s fastest-growing vehicle brands.

Chevrolet provides consumers with fuel-efficient, safe and reliable vehicles that deliver high quality, expressive design, spirited performance and value. The Chevrolet portfolio includes iconic performance cars such as Corvette and Camaro; dependable, long-lasting pickups and SUVs such as Silverado and Suburban; and award-winning passenger cars and crossovers such as Spark, Cruze, Malibu, Equinox and Traverse.

X-ray use shows lack of 20-20 vision

A container scanning system is rubbing scores of businesses up the wrong way at Haiphong port.

Sources from local logistics service companies told VIR that the $8.8 million X-ray container scanning system for imported and exported goods at the port was irritating hundreds of firms.

A Hanoi-based logistics firm representative said firms had to ask for written permission from container owners before scanning which was burdensome. “They also have to seek written permission from the port’s customs agency to move containers out of the port area for scanning.”

The source said the system worked a limited number of hours per day which caused container congestion and forced firms to pay fees for containers kept at the scanning area.

Moreover, companies had to pay fees for lifting and landing containers when they were scanned.

Another logistics firm source lamented that the scanning system was located three kilometres from the port which was a nightmare. “The process took time and cost over $100 for a container to be scanned.”

Each container used to be physically examined by customs officers at the port for at least two hours. Vietnam Customs claimed the scanning system had helped reduce the time to only 15 minutes for each container, while assisting enterprises to save costs.

The container scanning system was put into operation in May, this year and is funded by the Japanese government through a non-refundable aid for a project to enhance customs management.

Expected to help detect trade fraud, prevent the trading of illegal cargo and shorten time for customs clearance, the scanner system was installed by Japan’s Sojitz Group and builder Nakano Company and manufactured by Britain’s Rapiscan System Company.

Controlled by a software system, it scans 150 vehicles transporting containers per day with 15 minutes per container.

In a similar development, a $9.6 million container scanner was in early April last year commissioned at Ho Chi Minh City’s Cat Lai port, which handles 45 per cent of containers moving in and out of Vietnam.

The system is aimed to accelerate the handling of containers, reduce storage costs for businesses, ease the congestion at the port and prevent smuggling and the transport of banned cargo.

This scanner is reported to run at 40 per cent of its capacity due to poor container transport services at the port. It is designed by US-based L3 Communications Corporation and funded by the Japanese government.

Mining plans to fall into hole

Investors seeking mining opportunities may have to shelve their plans indefinitely after a government decision to temporarily halt all new projects.

Government Office chairman Vu Duc Dam said government members had unanimously agreed to boost oversight of mineral mining because local authorities had been granting licences willy-nilly to mining projects. This in turn had caused environmental pollution and irritated local residents.

“The government’s policy is to closely control this industry. [Thus] the government has ordered an immediate stop to the granting of investment certificates to new projects,” said Dam. He added that all provincial authorities had to review mining activities in their province and report back to the government in a meeting to be held at the end of this month.

But, Dam did not specific how long this policy would remain in force.

The government’s decision will mean local and foreign investors seeking new mining investment opportunities will now have to bide their time.

Considered a mineral-rich country, Vietnam has attracted foreign investors to 69 mining projects with total committed capital at nearly $3 billion up to the end of last month.

Many foreign companies have expressed an interest in this sector.  Japanese companies are among those seeking opportunities in Vietnam. Itochu Group and Toyota Tsusho and Sojitz Corporation are exploring rare-earth mines in Lai Chau province. Meanwhile, Sumitomo Corporation is exploring rare-earth potential in Yen Bai province.

Australian companies are also eyeing mining projects in this country. “Australian interests in Vietnam’s mining sector are small, but growing,” said Brian O’Reilly, vice chairman of the Australian Chamber of Commerce in Vietnam. “Vietnam has huge potential in terms of attracting foreign mining companies,” said Japan’s IF Technologies Limited chairman Mitsuhide Tanikawa. Last year the firm invested in a silica mining project in Quang Ninh province.

It is now seeking investment projects in titanium and rare-earth mining projects in Binh Thuan and Yen Bai provinces, respectively.

But Tanikawa said the latest government move could impact on companies’ investment plans in Vietnam.

“Investors may be deterred if the Vietnamese government delays licencing new projects too long,” he said. However, Dam said the government’s actions were essential to prevent ineffective mineral exploitation activities.

In line with the decision, Prime Minister Nguyen Tan Dung also asked Ministry of Natural Resources and Environment to draw up a 10-year development strategy for Vietnam’s mining industry to ensure effective mineral exploitation in the country.

Chevron upbeat on high energy investment plans Vietnam gas project

American oil and gas producer Chevron expects to have a final investment decision for a potentially hugely lucrative offshore and pipeline development worth more than $4 billion by the year’s end.

Total project investment by all parties for the full value chain, including four power plants, will be over $7 billion.

The company said the Block B gas project was designed to supply natural gas from Chevron’s production sharing contracts off southwest Vietnam to existing and proposed power plants in southern Vietnam.

The project includes installation of wellhead and hub platforms, a floating storage and offloading vessel, field pipelines, a living quarters platform and a central processing platform.

At last week’s meetings between US-ASEAN Business Council and Vietnam’s ministries of Foreign Affairs, Industry and Trade (MoIT) and Planning and Investment (MPI), Chevron Vietnam president Hank Tomlinson said that if the project was inked by the year’s end, it would churn out its first gas batch by 2015, per the schedule in the government’s recently-approved Power Master Plan VII.

“Chevron has been operating on this project in Vietnam since 1996 and we are working with PetroVietnam to develop Block B gas project, which has three components including offshore gas supply, construction of a 400 kilometre pipeline and construction of four power plants,” Tomlinson said.

He said the total investment capital of the entire value chain was over $7 billion, including over $4 billion for gas development and pipeline installation, and about $3 billion for constructing four power plants.

Of the capital, foreign investment contribution for the value chain would be over $4 billion, including O Mon II power plant, which will be bid out as a build-operate-transfer (BOT) project. Chevron’s share would be about $2 billion in gas development and pipeline installation. This investment would make Chevron the biggest US investor in Vietnam.

The foreign investment contribution would include Chevron, MOECO from Japan and PTTEP from Thailand.

The remaining contribution would come from PetroVietnam, Vietnam Electricity (EVN), and other investors.

He said Chevron was now finalising technical and commercial issues with PetroVietnam and would soon be ready to discuss the full cost of the project, which would contribute to the gas price. “After the costs are determined, they will be submitted to the government for approval, and an initial gas price will be agreed.”

Deputy MPI Minister Nguyen Van Trung said MPI would work with MoIT to nut out gas price solutions which could benefit investors and the government.

“The project will go a long way to providing energy supplies that Vietnam currently needs. It will increase total output of electricity in Vietnam by 17 per cent.

“This project will provide clean reliable local fuel for electricity for the next 20 years. Over the life of the project, there will be taxes, revenue and royalty generated for Vietnam amounting to more than $14 billion. Because the natural gas is the local fuel supply, it can help Vietnam avoid having to spend over $18 billion importing fuel for coal-fired power plants,” said Tomlinson.

The pipeline project completed front-end engineering and design in 2011.

Meanwhile, Chevron said exploration and analytical work continued on the blocks. In 2010, the company analysed results from past wells and finished processing seismic data and it prepared for a drilling campaign expected to start in 2012.

Chevron started investing in Vietnam in 1996.

German to boost Soc Trang province’s natural resources

Germany will provide 3 million euros to implement phase two of the Management of Natural Resources in the Coastal Zone project in Soc Trang province.

The money is in the form of non-reimbursable technical assistance for three years from 2011 to 2013.

The overall objective of the project is protect Soc Trang’s coastal wetlands.

The objective of this second phase is for relevant authorities and their extension services, together with the local population, implement tested measures for sustainable management of coastal ecosystems and climate change adaptation in selected coastal districts of Vinh Chau, Tran De and Cu Lao Dung.

The project is being implemented as part of the integrated coastal and mangrove protection/Climate change and coastal ecosystems program (ICMP/CCCEP) in the Mekong Delta that was supported by the German and Australian governments.

Fusion Resorts to sign new five-star Fusion Maia property

Fusion Resorts has just signed its newest Fusion Maia property on a 50-hectare resort in Binh Thuan province’s Ham Tan district with KTG Land.

Design and development company behind Fusion, Serenity Holding will also take a stake of 30 per cent in the resort to guarantee its quality and sustainable development.

Serenity Holding’s CEO and co-founder Marco van Aggele said “The addition of Fusion Maia Ham Tan to our chain will be very necessary to take tourism developments in south Vietnam to the next level.”

Aggele explained that the mostly low quality developments in Mui Ne and Vung Tau could not satisfy the increasing demand of high-end hospitality accommodation. The large size of the property would allow a phased development of high-end hospitality and real estate product in the years to come. In the coming months, the in-house design team of Serenity Holding will work out a design concept that will need to fit to the innovative management style and services of Fusion.

KTGLand’s chairman and co-owner, Dang Trong Ngon also explained “With Fusion on-board Iam more confident taking a project of this dimension in my portfolio, especially considering the current market conditions. I am glad the overall strategy is to develop the land in line with the market demand, which allows me to already receive good earnings on my initial investment in an early stage of the development”.

KTGLandis also the owner of Fusion Zana Phu Quoc, Fusion Suites Danang and soon to be signed Fusion Zana Nha Trang.

After the recent successes of Fusion Maia Danang, Fusion Alya in Hoi An and La Gi, Serenity Holding has been receiving many requests to continue the expansion of the innovative resort chain within Vietnam.

The first three outstanding properties are currently conquering the Vietnamese market with a fresh innovative ways of looking at hospitality concepts based on the market demand and the location’s characteristics.

Ham Tan is one of those locations that the developers wish to add to the Fusion portfolio, especially because of the short distance to Ho Chi Minh City and the near future freehold status of the land.

Fusion Resorts gracefully spin around the concept of “fusion”, which lies in the unconventional combinations of elements that it was hardly find elsewhere.

All located in gorgeous locations in the culturally bounteous Vietnam, Fusion resorts infiltrate nature into contemporary design, spiritual wellbeing into luxurious conveniences.

PV