Chile's firms seek business opportunities in Viet Nam

More and more Chilean businesses are seeking opportunities in Viet Nam, especially in the mining, oil exploration, seafood, beverage and fruit production sectors, says the Viet Nam Trade Office in Chile.

Chile, in turn, is also encouraging Vietnamese businesses to look to their market and promoting trade to further understand habits and consumption trends.

The bilateral economic relationship between the two countries had developed fruitfully over the past years, said the Ministry of Industry and Trade's Import-Export Department.

Viet Nam now ranks 42nd among Chile's trade partners, accounting for 0.16 per cent of the country's total export value.

Two-way trade reached US$240 million in 2009, $115 million of which came from Vietnamese exports, including coffee, shoes, garments and rice. It was estimated to top $300 million last year, a 31-per-cent year-on-year increase.

Trade experts also said that Vietnamese businesses would have a better chance of accessing third markets, in Latin America in particular, that are already trade partners of Chile.

Vietnamese firms would also enjoy preferential taxes and tariffs under the free trade agreements Chile has signed with many other countries.

Meanwhile, by doing business with Vietnamese counterparts, Chilean enterprises would have the opportunity to establish partnerships with others in the ASEAN region.

The bilateral trade between the two countries, however, was still modest, especially in Viet Nam's competitive areas, such as electronics, furniture, handicrafts and seafood, and in the areas in which Chile had advantages like machinery, equipment, agricultural products, forestry and fisheries.

The two governments have sped up negotiations on a free trade agreement (FTA), which is expected to expand co-operation opportunities.

The industry and trade ministry had planned to step up trade promotion and increase the export value, the department said.

Heavy sell-off pushes stocks down

Heavy profit-taking pushed the VN-Index in HCM City down 1.85 per cent this morning to close at 509.88.

Losers outnumbered gainers by 200-42.

Major influential stocks on the index suffered sharp declines, including Bao Viet Holding (BVH) falling to the floor by VND5,000 and Masan Group (MSN), which fell by VND4,500.

Vietcombank (VCB) and Vinamilk (VNM) were two of the few blue chips to post gains. VCB rose VND4,500, while VNM increased by VND1,600.

Volume was low as 38.3 million shares totalling a value of VND1 trillion ($47.6 million) changed hands.

In Ha Noi, the HNX-Index fell 1.53 per cent to close the session at 106.22.

Losers, with 241 stocks, were four times higher than gainers on the exchange.

Stocks sinking to their floor prices were Luong Tai Investment Construction (LUT), down VND2,700; An Phat Plastic and Green Environment (AAA), down VND2,600; and Vinaconex Advanced Compound Stone (VCS), down VND2,500.

Volume was low as 26.6 million shares worth a value of VND483.9 billion ($23 million) changed hands.

Vietnam, Japan sign ODA agreements

The Ministry of Finance and Japan International Cooperation Agency (JICA), on January 24 in Hanoi, signed three agreements on Japan’s Official Development Assistance (ODA) for projects under the 2010 fiscal year’s first commitment.

These projects included the 9th Poverty Reduction Support Credit (PRSC 9), additional loans for the Nhat Tan Bridge II project, and additional loans for the Nghi Son Coal-fired Power Plant II project. 

They were worth 58.18 billion JPY. One of them was under the poverty reduction program and other two were for infrastructure development, part of traffic and energy building.

Japan remained the largest bilateral ODA provider to Vietnam for the past 19 years, with an engaged capital by 1,450 billion JPY (US$15 billion). This mostly focused on infrastructure development, such as the Pha Lai Coal-fired Power Plant, Phu My Power Plant, Ham Thuan-Da Mi Power Plant, National Road 10, National Road 18, Binh Bridge, Hai Phong Port, Tan Son Nhat Terminal International Airport, Noi Bai Terminal International Airport and East-West Avenue.

These projects contributed greatly to Vietnam’s socio-economic development.

Vietnam, Netherlands enhance PPP in agriculture

The agriculture cooperation between Vietnam and the Netherlands under the public-private partnership (PPP) has seen positive development, according to the Ministry of Agriculture and Rural Development (MARD).

MARD’s International Cooperation Department said the fisheries, cocoa and coffee industries have benefited the most from the cooperation. The Netherlands will help Vietnam become a full member of the Western and Central Pacific Fisheries Commission (WCPFC). Both countries have agreed to seek funding for a programme to train quarantine officers and law makers in the European Union (EU) food safety and law.

The Netherlands has pledged an investment of EUR300,000 over the 2010-2012 period to improve the sustainability of tra and basa fish rearing method in Vietnam.

In addition, the Netherlands has proposed a programme on sustainable production and business development for Vietnam’s coffee industry. Donors are expected to contribute 47 percent of the EUR32 million programme to be carried out until 2012.

A delegation of the Dutch Ministry of Economic Affairs, Agriculture and Innovation is on a week-long fact-finding tour to Vietnam until January 24 to devise a new PPP project on cocoa’s sustainable development in Vietnam.

The two countries have also paid due attention to the government to government cooperation. The Netherlands is working on three proposals in this form regarding the planning of Vietnam’s slaughtering and meat processing system, boosting Vietnam’s potato production and protecting Vietnam’s domestic pig species from foreign diseases.

Vietnam sees positive signs of FDI

Last year’s foreign direct investment (FDI) reached nearly US$18.6 billion, equal to 82.2 percent of the previous year. Although the country has not fulfilled the set FDI target of US$22-25 billion, the results still prove investors’ strong confidence in Vietnam’s business environment.

Last year, around 55 nations and territories in the world poured their money in Vietnam. Singapore took the lead among major foreign investors with the total registered investment capital of more than US$4.4 billion, making up nearly 24 percent of the total FDI, followed by the Netherlands and the Republic of Korea.

The failure in fulfilling the FDI target is attributed to the world’s economic downturn, slow progress in upgrading infrastructure and human resources which do not meet investors’ demands. Another reason is that localities need to improve the effectiveness of their assessment when granting investment licenses, after a series of projects worth billions of US dollars have been implemented at a very slow pace. Dr Ha Xuan Tu, Deputy Head of the Department for Foreign Economic Relations under the Ministry of Planning and Investment further explains that the State’s objective is to promote socio-economic development along with environmental protection.

FDI disbursement continued to be in the spotlight last year. US$11 billion in FDI have been disbursed, up 10 percent compared to the previous year’s figure thanks to active and effective measures taken in recent time.

One of the alarming issues in the management of FDI businesses is that over 50 percent of them have claimed losses and that most of joint ventures turned out to be entirely foreign-invested. Despite proving that they had been claiming losses, they continued to expand their production and business activities, in fact, evading taxes. Many localities have withdrawn their investment licenses. It is necessary to devise policies to improve the quality of FDI, for example through preferential treatment to hi-tech projects, as well as projects that contribute directly in the country’s socio-economic development.

Director of the Foreign Investment Research Centre, Dr Phan Huu Thang says that it is high time that we carefully select these projects which meet the demands of the country’s socio-economic development and promote its industrialisation and modernisation process.

President of Foreign Investment Business Association, Dr Nguyen Mai says that the country should adjust its orientations and policies to improve the quality of FDI inflow into Vietnam. Priority should be given to projects in such fields as electronics, informatics, services and training of highly qualified human resource, and modern healthcare centres, as well as technical infrastructure.

With last year’s positive results, it is forecast that FDI disbursement is likely to reach US$11-12 billion this year with a registered capital reaching around US$20 billion. Deputy Minister of the Planning and Investment Dang Huy Dong affirmed that this year will focus on attracting large-scale projects with major partners, creating favourable conditions for Vietnam to increase the added value and get involved in the global value chain.

A lesson learnt from FDI attraction last year is to withdraw investment licenses of delayed or unfeasible projects. This way, the land can be used for feasibility projects that benefit the national economy as well as workers. This is also one of the measures to improve the quality of FDI in 2011 and the following years, meeting the country’s demands for development in the near future.

Saigontourist welcomes Costa Classica cruise ship

Saigontourist Travel Service on January 22 received 2,500 tourists from Costa Classica cruise ship during its tour across Vietnam that includes HCM City, My Tho, Da Nang, Hoi An, Hue and Ha Long Bay.

Most visitors are from Italy, Spain, Germany and the UK.

After docking at Lotus Port, the visitors will travel to HCM City, Cu Chi tunnels and My Tho city, Tien Giang province.

They will attend entertainment activities and taste the daily life of local people through shopping at Ben Thanh Market, watching puppet shows, and visiting Nam Son lacquer workshop.During Tet, Saigontourist is expected to welcome 3,700 visitors from cruise ships, such as Amadea, Pacific Venus and Costa Classica.

In 2010, Saigontourist received more than 60,000 visitors from the UK, France, Germany, Italy, and Spain.

Solar cell plant to be built in HCM City

The Ho Chi Minh City People’s Committee has given the nod to the US-based First Solar Group to build a solar cell plant in the South-East Industrial Zone of Cu Chi district.

Le Thanh Hai, Politburo member and secretary of the municipal Party Committee handed over the investment certificate to the group on Jan. 21.

As the largest foreign-invested project in HCM City in 2010, the one billion-plus US$ plant will produce thin-film solar power panels.

According to Tymen DeJong, the group’s Vice Chairman in charge of global production, the first phase of the project will be kicked off on Jan. 24 at a cost of US$300 million and include four lines.

The project’s capacity will be raised four times in the next phase, he said, adding that the plant is scheduled to be officially put into operation by mid-2012.

The project is of significance to HCM City, where the demand for energy, especially electric power is great and decisive to the city’s development, said Le Hoang Quan, Chairman of the HCM City People’s Committee, underlining the importance of the project.

He also spoke highly of First Solar Group’s position as the world’s largest thin-film solar power panel producer, taking the lead in using clean, green materials for its production.

The large-scale project reveals the improved investment environment of HCM City and the city’s investment policies that target areas of science, environmental protection and high added value.

First Solar Group was established in 1999 and began commercial production in 2002.

Plan to expand Dung Quat economic zone

The Dung Quat Economic Zone (EZ) in the south-central province of Quang Ngai will have its total planned area raised to more than 45,300ha under a revised master plan for the zone until 2025, approved by Prime Minister Nguyen Tan Dung last Thursday.

It will be expanded from the current 10,300ha to cover an extra 24,280ha of land and 10,752ha of sea surface.

The plan calls for EZ to become a general multi-sectoral and multi-disciplinary zone, with a focus being put on oil refining, petrochemical, chemical and heavy industries.

Its heavy industries will include steel-smelting and – rolling, shipbuilding and other industries that can exploit the uses of the deep-water seaport.

The EZ has also been designed to become an open industrial town, a national oil-refining and petrochemical centre, and an industrial and port services urban centre in the central key economic zone comprising Van Tuong, Doc Soi, and Chau O-Binh Long urban areas.

Apart from existing industrial parks, the EZ will be expanded with more industrial parks, and Dung Quat seaport No 2 to be built in the southern and southeastern areas.

The traffic network will also be extended with the construction of Da Nang-Quang Ngai expressway along the EZ's western border. A railway line and a 50ha warehouse will be built as well.

The zone's waterway will be located at port clusters at Dung Quat No 1, Dung Quat No 2 and Ly Son seaports.

Lying outside of the zone's precinct, Chu Lai Airport will serve as the main gateway to the EZ.

After 14 years of construction and development, Dung Quat Economic Zone has been recognised as one of the most successful pioneers among the country's EZ models, registering an average 2006-10 annual growth rate of 18.53 per cent.

The zone's industrial production value has annual increased of 53.6 per cent, contributing significantly to the socio-economic development of Quang Ngai Province.

The EZ is home to the country's first heavy industry cluster, including the Dung Quat oil refinery, a heavy-equipment manufacturing factory, plastic-making factory, steel-smelting and – rolling factory, and a planned biofuel factory.

As of January, a total 113 projects had obtained zone investment certificates, with total registered capital of US$9.3 billion and implemented capital of $5 billion, creating 12,000 jobs.

PV