Banking & Finance
- Dragon Capital fired up by investment fund
- BIDV signs deals to lend big bucks to projects in Hanoi, HCM City

Investment
- Hong Kong firm sells off stake in Furama
- Project hits the skids in paradise
- Canon starts work on its largest laser printer factory in VN
- World leading glove-maker plans to invest in VN

Import - Export
- Export goal nearly reached
- Labour exports to RoK expected increase this year

More business news
- Vietnam reports 2nd fastest growth in region: ESCAP
- Samsung-Vina crowned top trademark in VN
- New oil reserve found offshore in southern basin
- Vietnam-Indonesia Business Forum to be held

Invitation for bids

Vietnam in close-up: A voice to be heard

Banking & Finance

Dragon Capital fired up by investment fund

Bitish fund management firm Dragon Capital Ltd. last week announced it successfully finished international fund raising to establish the Vietnam Growth Fund (VGF), a new close-ended fund for Vietnam.

"We have raised a total of US$75 million for the new fund, after nearly one year of going abroad to encourage investors to pour money into the country," said Dominic Scriven, director of Dragon Capital Ltd.

"We didn't wait until VGF raised enough to invest. We began disbursing the funds as soon as we received them," he said, adding nearly 45% of the funds have been disbursed to various portfolios, including listed and unlisted stocks.

Dragon Capital has operated the West Indies-based Vietnam Enterprise Investments Limited (VEIL), which is now the largest foreign investment fund in Vietnam, with registered capital of US$130 million.

Scriven said the entire US$130 million has already been invested in stocks, and VEIL's net asset value (NAV) has annually grown by 15% over the past four years.

Scriven said he had faith in the growth of the local bourse, claiming there are vast opportunities for investment in Vietnam. The new funds will enable VGP to capitalize on attractive opportunities, including buying into private and listed companies.

Apart from Dragon Capital Ltd., many foreign fund managers have expressed optimism about their portfolios and tabled plans to raise more funds to invest in Vietnam's businesses.

Foreign investment funds can now operate in a better business environment. The legal framework is clear for foreign investment in shareholding companies and listed firms, and the number of State-owned enterprises going public is always growing. (VIR)

BIDV signs deals to lend big bucks to projects in Hanoi, HCM City

The Bank for Investment and Development of Vietnam (BIDV) on Apr. 24 signed four deals to make major loans to projects in Hanoi and HCM City.

Under the first contract, the State commercial bank and the HCM City Investment Fund for Urban Development will advance more than VND468 billion to the Saigon Coach Co. to buy more buses.

The lending period is 10 years, and the bank provides 92.3% of the total loan. The transport company will order 1,316 buses from the Vietnam Motor Industry Corporation.

The second contract covers lending VND310 billion or less to the Construction Corporation No. 1 to build Thu Thiem bridge over Saigon river in HCM City.

Under the third deal, BIDV and other Vietnamese banks will extend a loan to Bitexco. The export, import and production company will receive sums equal to US$60 million (VND950 billion) or less to construct a 61-story building in HCM City's District 1.

For the fourth contract, the bank's Transaction Office 1 has pledged to lend money to those who want to buy houses and apartments that Bitexco is building inside the Manor and the Garden complexes, covering more than four hectares in Hanoi's Tu Liem district.

Those who buy a property will be able to borrow up to 70% of its value for a maximum of 10 years. BIDV will soon focus more on extending loans to property buyers. (VIR)

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Investment

Hong Kong firm sells off stake in Furama

The Hong Kong-listed property developer Lai Sun Development has disposed its stake in the Furama Resort in Da Nang, a gateway into central Vietnam.

In an announcement posted on its website www.laisun.com.hk, the company said its two wholly-owned subsidiaries, Furama Hotel Enterprises Ltd. and Transformation International Ltd., have agreed to sell the entire issued share capital of Furama International Hoteliers Limited to the Vina Investment Group Ltd.

The sellers had a 62.62% interest in the capital contribution of Indochina Beach Hotel Joint Venture, which owns the five-star Furama Resort. The aggregate purchase price is US$16.8 million that will be payable in several installments.

Lai Sun said it would continue to manage Furama Resort for two years following completion of the deal on July 8.

Lai Sun did not say how much it has invested in the Furama, but the Indochina Beach Hotel Joint Venture has said in the past it had poured in a total of US$40 million to build the 198-room resort, which was completed in 1997 to become Vietnam's first five-star resort.

Furama is one of the best performing resorts in Vietnam, receiving about 80,000 visitors annually and charging an average room rate of US$100 per night. Its owners have long flagged plans to double the number of rooms and build a golf course in Da Nang, although there is no definite commitment on either of these proposals.

Vina Investment Group is an investment fund specializing in pouring capital into local companies and is registered in British Virgin Islands. (VIR)

Project hits the skids in paradise

Investment authorities have pulled the plug again on a US$27.6-million five-star hotel project in Da Nang, after its Hong Kong developers failed to make any progress more than two years after receiving a license.

The Ministry of Planning and Investment has recently revoked the investment license for the Hong Kong-registered Riverview Co. Ltd. to build a 220-room hotel, along with 30 serviced apartments, at 74 Bach Dang street.

Riverview is the second company to have its license withdrawn to build a hotel on the 3,500sq.m site by Han river. Australian company Leda Holding also failed to develop a hotel project on the site after it received a license more than a decade ago.

Riverview received an investment license to build the first five-star hotel in downtown Da Nang in December 2002 and broke ground for construction nine months later. Since then, hardly a brick has been laid on the site, which now functions as a car park, and Da Nang authorities, impatient about the developer's inertia, threatened to withdraw the license if Riverview did not start construction in January.

Riverview management stressed they were serious about the project, having already invested almost US$1 million, and hoped to complete the hotel by the end of 2006.

A source close to the project said the developers were proceeding with the hotel so slowly because they had to find partners for the project, a process that was time consuming. The developers were unavailable for comment.

Da Nang authorities also decided to withdraw a license for a local company who wanted to build an US$18-million hotel and commercial centre in the city, but failed to mobilize adequate investment capital.

Despite these setbacks, other developers are lining up to build luxury resorts along the coast of Da Nang, which is now home to the five-star Furama Resort. (VIR)

Canon starts work on its largest laser printer factory in VN

Construction on a US$50 million laser printer factory, which will be Canon's largest, began at the Que Vo Industrial Park (IP) in northern Bac Ninh province on April 25.

The wholly Japan-invested project has a designed production capacity of 8.5 million printers a year. It is expected to be operational early next year and meet 35% of the world's demand for laser printers.

General director of Canon Vietnam Sachio Kageyama said the company will be exempted from income tax for four years and see a 50% tax reduction for the following nine. It will then be assigned the business income tax rate of 10%.

Kinh Bac Urban Development Joint-stock Company, the investor of the Que Vo IP, has set aside 100ha out of the total 311.6ha for businesses which will supply components to Canon. (VNA)

World leading glove-maker plans to invest in VN

One of the largest glove manufacturers in the world is to invest some US$105 million to establish nine factories in Vietnam over the next 10 years.

Supermax Corp Bhd is expected to build up its factories every 12 to 18 months, to enable a combined annual capacity of 20 billion gloves.

The Malaysian glove-maker recently acquired APL Industries Bhd (APLI) to form a base in Vietnam, aiming to leverage on the cost advantage in the country to stay competitive in the original equipment manufacturer glove segment for the medical and food industries.

Thai said the expansion will be financed with the group's internally-generated funds, along with bank loans and the debt and capital markets. He did not discount the possibility of foreign investors entering the picture.

Having completed the initial phase of the first factory in Vietnam last year with a capacity of 1.73 billion pieces a year, APLI expects to finalize the second phase with another 864 million pieces of gloves annually by the third quarter of this year.

The second plant is expected to come into operation by 2006, stretching the production base by 3.46 billion pieces a year. (VnMedia)

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Import - Export

Export goal nearly reached

Figures released by the General Office of Statistics on April 25, 2005 showed that export turnover of this month was estimated at US$2.65 billion and of the first fourth months of this year totaled over US$9.65 billion, 23.2% higher than last year's same period.

Domestic sector gained an export receipt of more than US$1.2 billion while US$1.6 billion was for FDI sector. Industrial exportation boosted thank to high demand for energies in the world market.

Export value of crude oil rose by 45% over last year's same period to US$478 billion; of coal increased to US$52 billion, 87% up over last year's same period. As oil prices surged, several measures have been taken to minimize input costs, bringing about positive changes in exportation.

Wood furniture export turnover went up by 57.1% above last year's same period to US$150 million; of electronics and computer totaled US$120 million, up by 55%; of plastics was US$33 million, up by 71%.

Industrial goods witnessed low growth rate, however. Textile and garment industry earned export revenue of US$370 million, up by 6%; leather and shoe sector obtained US$230 million, up by 6.5%.

The situation was not so good for agricultural products. Rice export turnover increased by only 10% to US$140 million; coffee export revenue rose by just 2.6% to US$72 million.

The problem of trade deficit has not been solved considerably. Import turnover of April totaled US$31.5 billion, of the first four months this year amounted US$11.4 billion, up by 22% over last year's same period. (Vneconomy)

Labour exports to RoK expected increase this year

Vietnam expects to send an estimated 7,000 labourers to the Republic of Korea (RoK) this year as per an agreement signed jointly by the two countries and foreign partners, which came into effect on August 17, 2004.

Under this agreement, about 1,411 Vietnamese labourers have already been approved for work in the manufacturing and machinery sectors, said the Department for Overseas Labour Management of the Ministry of Labour, Invalids and Social Affairs.

Vietnam, with 4,000 labourers, ranks top on the labour recruitment list of RoK companies. In addition, about 355 trainees from Vietnam were granted RoK visas in the first quarter of this year. In March alone, Vietnamese companies sent 110 labourers to the RoK.

The number of Vietnamese labourers, who break their contracts, have reduced drastically, thanks to the efforts of the Vietnamese enterprises, the RoK police and companies, the department said.

Meanwhile, the RoK Government has decided to revise the present system of foreign labour contracts granted to industrial trainees, according to the Korean Minister of Labour Kim Tae Hwan.

As per the revision, the RoK will only grant contracts for guest workers for projects jointly undertaken with foreign partners, including Vietnam, the minister told a Vietnam News Agency (VNA) reporter in an interview in Seoul last week.

The RoK Labour Ministry would also issue training regulations, making Korean language certificates obligatory for foreign labourers. (VNS)

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More business news

Vietnam reports 2nd fastest growth in region: ESCAP

Vietnam's was the second fastest growing economy in Southeast Asia in 2004, reporting a GDP growth rate of 7.7%, according to a survey conducted by the Economic and Social Commission for Asia and the Pacific (ESCAP). More »

Samsung-Vina crowned top trademark in VN

Samsung-Vina's TV products were named the top trademark in Vietnam by the international market research institute GFK at a ceremony in Ho Chi Minh City on April 23. Samsung's colour computer screen and computer liquid crystal dislay (LCD) also share the title.

According to the German-based GFK's survey, Samsung holds 22% of the market for colour TVs in Vietnam, 33% for colour computer screens and 39% for computer LCDs, leading all other rivals.

The Samsung Electronic Group obtained a turnover of US$55.2 bilion in 2004, to which Samsung-Vina contributed over US$140 million, up 20% year-on-year. (VNA)

New oil reserve found offshore in southern basin

A new oil and gas reserve has been found in the Nam Con Son basin offshore of southern Ba Ria-Vung Tau province, the Vietnam-Russia Oil and Gas Joint Venture (Vietsovpetro) said last week.

The reserve was discovered at the Mang Cau-Thien Ung Structure within the Lot 04-3 in the Nam Con Son basin, 370km southeast offshore Ba Ria-Vung Tau province, Vietsovpetro said.

First exploration pumps produced 240cu.m of oil and 1.1 million cu.m of gas a day, which are of high quality, Vietsovpetro officials said. (TN)

Vietnam-Indonesia Business Forum to be held

The Vietnam-Indonesia Business Forum will be held in Ho Chi Minh City on April 28, 2005 with the participation of Indonesian Trade Minister, Elka Pangestu, and representatives from the Vietnam Chamber of Commerce and Industry (VCCI) and Indonesian Chamber of Commerce and Industry (KADIN).

The forum aims to search for new opportunities and potential in boosting bilateral trade between Indonesia and Vietnam and pave the way for an enhanced relationship between the two ministries of trade, VCCI and KADIN.

During the forum, there will be one-on-one sessions with VCCI and Vietnamese entrepreneurs to find concrete ways and means to boost trade circulation and co-operation between the two nations.

It hoped that the forum would encourage further activities to lay the foundations for boosting not only business contacts but also people-to-people contacts as enshrined in the Declaration on the Framework of Friendly and Comprehensive Partnership Entering the 21st Century signed between the governments of Vietnam and Indonesia in June 2003. (VOV)

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