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VIETNAM - BUSINESS IN BRIEF 18/11  DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1


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Post by lexie Thu Nov 17, 2011 8:42 pm

Last update 18/11/2011 07:00:00 AM (GMT+7)

Japanese group to invest in Vietnam

Japanese Zeon Group plans to invest in Vietnam in its effort to reduce costs and investment risks.

In the initial period, Zeon will build a plant to make special casks, each with a cargo capacity of 1.3 tonnes of rubber from April 2012.

The plant will be built on an area of 94,000sq.m in Haiphong with a total cost of 2-3 billion yen (US$26-39 million). Once completion in April 2013 it is expected to produce around 120,000 casks per year.

Later the plant can be used to produce some kinds of medical equipment.

Previously, Zeon asked its Chinese partner to produce casks. However, thanks to cheap labour in Vietnam, Zeon has decided to build its own plan in the country.

Zeon specializes in rubber, chemicals, machinery, electronics and food, and it is famous for tyres and automobile spare parts.

Suzuki to build automobile plant in Vietnam

Suzuki Motor Corp, one of Japan’s leading automobile and motorbike manufacturers has agreed to build a new automobile plant in Vietnam.

The new plant will be located in the southern province of Dong Nai. With a total investment of 1 billion JPY (about US$13 million), it is expected to meet the growing demand for autos in the Vietnamese market.

It is scheduled to be put into operation by 2013 with an initial production capacity of 5,000 units per year, which will be increased gradually in the following years.

Suzuki Motor has produced motorcycles and automobiles in Vietnam since 1993. At present, it turns out about 3,000 cars per year.

Vietnam, US foster agricultural cooperation

Vietnam wishes to boost agricultural cooperation with the US, a country having great potential.

Deputy Prime Minister Hoang Trung Hai expressed his aspiration while receiving visiting US Secretary of Agriculture Tom Vilsack in Hanoi on November 16.

He also expressed his hope that the US would boost cooperation with Vietnam in response to the impact of climate change, especially when large acreages in the Red and Mekong river deltas - the major rice-growing areas of the country - are forecast to be inundated due to rising sea levels.

Tom Vilsack said he is willing to share experience with Vietnam to help increase the value of agricultural products and raise for farmers’ incomes.

He added that the US plans to import lychee, longan and other fruits from Vietnam following the Global Gap standard and wants Vietnam to open its market for beef from the US.

Vietnam’s dragon fruit, rambutan, mango and star apple are already popular in the US.

The same day, Vilsack had a working session with Vietnamese Minister of Agriculture and Rural Development Cao Duc Phat.

Vilsack’s visit to Vietnam is aimed at promoting his country’s farm produce and seeking cooperative opportunities with Vietnam.

At present, Vietnam is an important market for the US. Over the past decade, Vietnam has jumped from the 50th place to 15th in the US list of farm produce importers with an import value of US$1.3 billion.

Also on November 16, Vilsack – the first US Secretary of Agriculture to visit Vietnam – met teachers and students of Hanoi Agriculture University.

Latest IT & telecommunications solutions displayed

An international exhibition on Vietnam Communications/ Vietnam Internet & IT/ Vietnam Electronics opened at the Vietnam Exhibition and Fair Centre in Hanoi on November 16.

Participation in the event included Minister of Information and Communications Nguyen Bac Son, and domestic and foreign leaders of businesses in the IT and telecommunications fields.

At the opening ceremony, Minister Son emphasized that the IT and telecommunications industries have strongly grown in recent years, making a great contribution to national socio-economic development.

The Vietnamese Government has always created favourable conditions for domestic and foreign businesses and organizations to invest in infrastructure and develop IT and telecommunications services in Vietnam, he noted.

The Minister also confirmed that the event is of great significance to Vietnam’s IT and telecommunications industries, helping businesses grasp market information and find out about new global technology solutions.

The exhibition has attracted more than 140 businesses from 15 countries and territories over the world. On display are the latest products and solutions for electronic, telecommunications and IT development demand. All can be applied in such fields as e-government, finance and banking, hotel management, education and training, and health care.

On November 16-17, IT experts will have discussions sharing the latest trends in developing telecommunications and IT in Vietnam.

The annual event is organized by the Vietnam Post and Telecommunication Group (VNPT) in co-ordination with the Vietnam Association for Information Processing (VAIP) and Adsale Exhibition Services Ltd.

As one of several activities during VNPT’s nationwide IT week, the exhibition will last until November 19.

Businesses explore opportunities in Berlin

More than 100 Vietnamese and German businesses attended a joint economic forum in Berlin on November 15.

At the forum, delegates spoke about their economic situations and preferential policies to attract foreign investors.

Vietnamese Ambassador Do Hoa Binh said the forum provides a good opportunity for businesses from both countries to explore their business and investment environment in many sectors including infrastructure, energy, hi-technology, and the environment.

He urged German businesses to invest more in Vietnam and expressed hope that Vietnamese goods and services will become more familiar to German consumers.

Harald Wolf, Berlin Mayor and Senator for Economics, Technology and Women's Affairs, confirmed the great potential for cooperation between Vietnam and Berlin, saying that the relationship will grow rapidly after the Berlin-Brandenburg International Airport is put into operation by mid-2012 and the Hanoi-Berlin direct flight route is announced

The event was jointly organized by Vietnam’s Southern Airports Services Company, the Viethaus, the Vietnamese Embassy, the Berlin Chamber of Commerce and Industry and the Postdam Chamber of Commerce.

The forum was the largest of its kind since the two countries became strategic partners after the German chancellor’s visit in October.

US$201mln contracts inked at Vietnam-China trade fair

Twenty economic contracts worth US$201 million were signed at the Vietnam-China International Trade Fair which ended in Lao Cai on November 16.

The week-long fair - the biggest of its kind – attracted nearly 300 organizations and businesses showcasing products on 700 stands. Among them were 112 organisations and businesses coming from China's Yunnan, Sichuan, Shanghai, Hunan, Jiangsu, Zhejiang, Beijing and Guangzhou.

Traditional products at the fair included: handicrafts, chemicals, garments, household utensils, agricultural products, machinery, electronics, equipment, motorbikes, timber products and medicines.

More than 12,000 visitors attended the fair and businesses’ sales turnover was around VND75 billion.

Organisers said the success of the fair opened up new opportunities for businesses of the two countries to strengthen their cooperation.

HCM City hosts Motor Show 2011

The Vietnam Motor Show 2011 opened at Saigon Exhibition and Convention Centre in Ho Chi Minh City on November 16.

At the opening ceremony, Deputy Minister of Industry and Trade Le Duong Quang acknowledged Vietnamese automobile businesses’ contributions to national economic development.

He expressed the belief that the businesses will adopt more positive measures to overcome difficulties, expand production, increase investment, and strengthen cooperation to better meet market demands.

Six members of the Vietnam Automobile Manufactures’ Association (VAMA) are attending the event. They are Toyota Vietnam, Honda Vietnam, Mercedes-Benz Vietnam, GM Vietnam, Suzuki Vietnam and the Saigon Transportation Mechanical Corporation (SAMCO).

On display are 60 new models of automobiles, spare parts and imported automobiles of Motor Sport. All 100 stalls cover an area of 10,000 sq.m.

The event ends November 20.

Dollar fears stalk firms

Exporters are concerned about borrowing US dollars due to supply shortages.

For example Nguyen Minh Sinh, chief operation officer of paint maker Moment Company, said the company had signed a loan agreement, but later the bank did not have enough foreign currency to lend the amount.

This is the common situation for many companies, especially for those in need of foreign currencies to pay debts with the year end approaching.

Experts said the pressure on dollar demands especially at the end of the year is hardly a surprise, particularly when Vietnam is still suffering from trade deficits.

For example, in the leather footwear industry, enterprises gain foreign currencies from exporting, but the majority of raw materials and machines were imported.

“In October, even when exports increased 25 per cent compared to last year, the production costs rose 30 per cent. Thus, the company has paltry profits,” said Truong Loi Trading-Production president Doan Sy Loi.

Another reason for the paucity of dollars was the gap in interest rates between different currencies. The interest for a dollar loan at 8 per cent, each year was much lower than that of dong at 18-19 per cent, each year.

“Firms are rushing to get a dollar loans,” Vietcombank vice president Nguyen Van Tuan said

Meanwhile, according to experts, supplies were tightened due to the economic downturn when export enterprises received fewer orders.

Lien Phat, a Binh Duong province export footwear company, is an example. Its president Truong Thi Thuy Lien said the European public debt crisis caused orders in the first quarter of 2012 to significantly reduce.

“Some 70 per cent of our orders come from Europe, the rest from America, South African and Australia. The negative impact from the European public debt crisis on the consumer demand caused the decline in future orders,” Loi of Truong Loi added.

In order to cope with the situation, companies choose to focus on its current the products, rather than spreading funds in diversifying them.

“We don’t want to aim for profits this year. The challenge is to maintain the stable production until the crisis passes,” Lien of Lien Phat said.

Design consulting deal struck for expressway project

A foreign consortium on Tuesday clinched a deal to provide design consultancy for the transport ministry’s Project Management Unit 85 to develop an expressway connecting Danang and Quang Ngai on the central coast.

The consortium consisting of Nippon Koei, Nippon Engineering Consultants, Chodai and Thai Engineering Consultants will complete the technical design consulting package worth US$12.1 million, which will be sourced from the World Bank, just in time for the road project to get off the ground next year.

The 139 km Danang-Quang Ngai Expressway is part of the North-South Expressway designed with a maximum speed of 120 kilometers per hour and six lanes, four of which will be built in the first phase.

The expressway starts from Tuy Loan Town in Hoa Vang District of Danang and ends in the west side of Quang Ngai City.

The total cost of the project is some VND28 trillion, or US$1.47 billion. WB will finance US$631 million for a 65km section between Danang City and Tam Ky in Quang Nam Province.

The 74km section from Tam Ky to Quang Ngai will receive a US$673 million funding from the Japan International Cooperation Agency (JICA). The remaining capital will come from the State budget.

After the Danang-Quang Ngai Expressway is complete, it will take less time to travel between Danang, Quang Nam and Quang Ngai as well as reduce traffic on National Highway 1A.

International transport between Laos, Cambodia and Vietnam via the East-West Economic Corridor to the central region will be facilitated. The expressway will also ensure smooth traffic even when flooding occurs.

Hyundai pulls out of engine making joint venture

Truong Hai Auto Joint Stock Co. (Thaco) has said that South Korea’s Hyundai Motor Corp. will transfer technology for Thaco to manufacture engines in Quang Nam Province, instead of getting involved in an engine production joint venture.

Thaco will make engines using Hyundai technology, said a source from Thaco, adding the change in the cooperation was signed by leaders of both companies in Ulsan City, South Korea while President Truong Tan Sang was leading a Vietnamese delegation to South Korea on an official visit.

Under the new contract, Hyundai will transfer the production technology of its engines to Thaco to produce instead of forming a manufacturing joint venture.

Hyundai engines with capacity from 68-155 HP will be produced in the first phase of the project, ensuring a localization ratio of 40% and meeting Euro 3 emissions standards applicable to trucks, buses, ships, agricultural machines and other industrial uses.

Total investment for the auto engine plant is US$200 million, including US$136.5 million for the first phase. In the capital breakdown, US$400,000 is used for technology transfer and US$50 for every engine produced in Vietnam.

In the second phase, Thaco will further invest US$47.5 million to raise the emissions standards to Euro 4, 5 and 6.

The Hyundai-Thaco partnership is considered a highlight in the Vietnamese auto industry as well as Thaco business as this is the first time a local company has had engine manufacturing technology transferred. This lays the foundation to develop a national automobile and versatile engineering industrial zone in Chu Lai Open Economic Zone.

The project is slated for operation in late 2012. The new engine plant will assemble light transport vehicles for export to ASEAN countries.

Tuna JV licensed in Phu Yen

Phu Yen Province on Tuesday issued an investment certificate for a Vietnam-Japan joint venture to invest in a project for buying, processing and exporting tunas.

Phu Yen Tuna Joint Venture, set up by Vinh Sam Co. and Japanese investors with a total investment of US$2 million, will go into operation in early February next year with annual output of 2,000-3,000 tons of tuna, with 80-90% of it for export.

The project is aimed at building a brand for Phu Yen tunas, protecting fish resources and transferring Japanese technologies of catching and processing tunas to local fishermen.

The tuna price depends on quality and demand but often ranges from US$8 to US$10 per kilogram.

Phu Yen Province has caught about 6,000 tons of tuna in the year to date with 24-30% exported to the U.S., Europe and Northeast Asia and an export turnover of over US$10 million.

Tuna, tra fish and shrimp are now Vietnam’s three major seafood export items, according to the Ministry of Industry and Trade.

Former U.S. treasury secretary in town

Former U.S. treasury secretary William Snow gave a talk on whether Vietnam is a reliable destination for leading international groups on Wednesday in HCMC, according to Link World Unlimited International Event Co.

Organizer Link World Co. said that Snow, chairman of Cerberus Capital Management L.P., was expected to offer a solution on how Vietnam could attract the world’s leading groups, especially giant capital funds.

Snow will also have a meeting and talks with the Government, the Ministry of Foreign Affairs and HCMC’s government during his four-day stay, from Tuesday until Friday, according to the organizer.

Snow was given the job as Secretary of Treasury by the then U.S. President George W. Bush in 2003. He will also lecture in Hanoi on Friday.

Credit loosened for some realty areas

The State Bank of Vietnam has removed a number of loans relating to real estate from the category classified as non-productive and required to account for less than 16% of total outstanding loans by the end of the year.

This is the content stipulated in Document 8844/NHNN-CSTT regarding credit activities for the rest of the year signed on Monday by Nguyen Dong Tien, deputy governor of the central bank.

A few loans excluded from the non-productive sector credit category now include consumer loans used for repairing and buying homes with repayment sources coming from salaries and other incomes of borrowers.

Similarly, the new document removes some other loans involved in property investment and business out of non-productive outstanding loans. These loans are used for building houses for sale or lease to low-income people and workers in industrial parks or building accommodation for workers with discounted rents or free of charge.

Those loans enjoying loosened credit policy also include loans to finish housing development projects that will be handed over to homebuyers or put into service before January 1 in line with related contracts.

At the same time, the central bank requested local lenders to timely meet demand for capital invested in the fields of agriculture, export, supporting industry and working capital at small and medium sized enterprises. Thus, any bank tending to lend money in such fields and thus causing the credit growth rate of the whole year to surpass 20% annually, need to report to the central bank for approval.

Also, the central bank asks commercial banks to continue supervisory measures in non-productive sector lending and pull down its credit growth to 16% a year accordingly. Furthermore, local lenders have to submit to the central bank reports on non-productive outstanding loans by the 12th day of the next reporting period.

Ministry promotes added value

The Ministry of Industry and Trade is conducting a survey of the cotton industry to help increase the level of added value in the nation's textile and garment products and help the garment industry reduce its dependence on imported raw materials.

The Viet Nam Cotton and Fibre Association said 2000 remained the best year for the cotton industry, with a total area under cultivation of 32-36,000ha. This fell to just 17,300ha in 2006-07 and only 3,000ha in 2008, before recovering last year to 10,400ha. In the meantime, domestic cotton production has met just 1 per cent of local demand, the association said.

Viet Nam Textile and Garment Corporation (Vinatex) general director Mai Hoang An said Viet Nam needed 370,000 tonnes of cotton for domestic production while local supplies met only 4,000 tonnes of this demand, with the rest being imported.

In 2010, garment exports totalled US$11.2 billion, but the industry imported cloth and fibres worth $6.5 billion, An said. While the gross export value of Vietnamese garments was high, the net added value of these exports remained low due to this need to import materials, he noted.

Tran Hung, deputy head of of the Ministry of Industry and Trade's Light Industry Department, said development of cotton growing in Viet Nam depended greatly on weather, and the output and quality of domestic cotton in Viet Nam was low and unstable.

To boost the cotton industry, State budget resources have been allocated to give financial support for building infrastructure, including irrigation systems for cotton-growing regions. The plan was expected to improve output and quality of local cotton, increasing the competitiveness of Vietnamese cotton.

Viet Nam Cotton and Fibre Association chairman Tran Dang Tuong also urged the development of a model cotton farm with high output and good quality as an example to other growers.

The State should also consider a cotton price stabilisation fund to give financial support to cotton growers and ensure price stability, he said. It could also provide assistance to investors seeking to grow cotton on large areas.

The Government currently targets a total growing area for cotton of 30,000ha with average output of 1.5-2 tonnes per hectare by 2015.

Petrol and gas price audit to be released next week

The results of an audit on petrol and gas prices at fuel dealers would be released next week, said finance minister Vuong Dinh Hue on the sidelines of the National Assembly meeting in Ha Noi today.

The National Auditing Office has focused on auditing the Viet Nam National Petroleum Corporation this time as the firm holds the largest market share of the domestic petrol and gas market, he said.

Additionally, the office has also audited petrol and gas trading activities at 10 other dealers as well as use of the petrol price stabilisation fund, he said.

They included PV Oil, Petec, HCM City Petroleum Ltd Company, Dong Thap Petroleum Trading Company, Aviation Petroleum Ltd Company, Mipeco, Mekong Petroleum Company, Seaway Petroleum and Trading Company and Thanh Le Trading and Import-Export Corporation.

Efforts required to curb year-end price hikes

Prime Minister Nguyen Tan Dung on Wednesday required all-out efforts to stabilise the domestic market in the run-up to the Lunar New Year holidays.

Authorities are worried that the usual Lunar New Year price hikes in the lead-up to the nation's biggest holiday will squeeze consumers who are already grappling with double-digit inflation.

PM Dung said market inspection and control must be tightened to avoid any speculation and price hikes near the Christmas and Tet (Lunar New Year) period.

The Government leader asked local administrations to take immediate measures to help small and medium-sized enterprises and agricultural businesses better access capital and produce while ensuring smooth trading.

All administrative procedures must be facilitated to cut down on production costs and maximise business efficiency, said the PM.

Companies usually justified the soaring prices of their products ahead of the Lunar New Year due to soaring demand from consumers.

Several food companies have already announced that they would soon raise product prices by 10 to 20 per cent for Tet.

The Viet Nam Railways has also increased fares by 39 per cent.

Cement makers face losses as market shares go down

Declined demand for cement consumption, alongside costly expenses, has caused the domestic cement industry to suffer a loss worth VND220 billion (US$10.53 million) during the first 10 months of the year.

During the same period, Viet Nam Cement Industry Corporation or VICEM's members have seen their market shares decrease significantly by 3 per cent.

The corporation said that low demand due to the freezing property market, high lending interest rates, a reduction on public investment projects and increased input costs were blamed for a decline in cement consumption.

Of the input cost, prices of fuel rose by 32 to 43 per cent; electricity, 15.28 per cent and coal 88 per cent, according to VICEM.

Meanwhile, VICEM's Chairman of Management, Le Van Chung told Vietnam Investment Review that as most cement projects were invested by foreign currencies, debt payment has become a huge burden to the corporation's members due to the global financial crisis, continuous depreciation of Vietnamese dong against US dollar, high lending interest rates and high inflation,

He cited that seven out of 10 cement plants are expected to be put into operation this year and the corporation's members were expected to pay back a debt worth VND3.2 trillion ($153.11 million), he said.

Taking part in the market since the end last year, Dong Banh Cement Plant – a fledging member of VICEM – posted a loss of VND141 billion ($6.75 million) after one year of operations.

The Dong Banh Cement Plant was lent up to 80 per cent by Bank for Investment and Development of Viet Nam, Bank for Agriculture and Rural Development and ANZ Bank.

According to the Ministry of Construction, the Dong Banh Cement Plant would be in a shortage of VND600 billion ($28.7 million) to pay back loans and interest during 2011-15 period.

The corporation, however, was considering several solutions to restructure the cement industry while sharpening its competitiveness. Of which, several inefficient cement plants might plan to file for bankruptcy.

An official of Viet Nam Cement Association said export activity was a good solution to combat high interest rate loans and slow cement consumption on the domestic market.

According to VICEM, the cement sector produced about 3.63 million tonnes of cement in October, bringing a total volume of 39.4 million tonnes in the first 10 months of the year.

In October alone, cement consumption declined significantly in comparison with the previous month.

Tax laws won't hit property valuation

The new tax on the use of non-agricultural land will not detrimentally affect the domestic real estate market, said Nguyen Dinh Thi, deputy head of the Ministry of Finance's Tax Policy Department.

Thi was speaking at a press briefing on two new tax laws in Ha Noi yesterday.

The non-agricultural tax and the law on environmental protection will take effect at the beginning of next year.

He said the law on non-agricultural land was designed not to raise money but to more effectively inventory and manage land.

"The money to be collected from the new taxes is estimated at VND3 trillion (US$143 million), which would be the same amount as collected from the current ordinance promulgated in 1992 on the use of land and houses," he added.

He said the new law would affect about 17 million households.

In addition, the law stipulates specific regulations governing taxpayers – organisations, households and individuals who use land in rural and urban areas.

Production and non-agricultural business land includes land for construction of industrial zones, land for mineral exploitation and processing, land for making construction materials and ceramics, among other things.

The new law stipulates three rates of tax – 0.03 per cent, 0.07 per cent, and 0.15 per cent.

He said the law would be stricter on land encroachment, for which a levy of 0.2 per cent would be applied, seven times higher than the tax imposed on allowable land area.

The Ministry of Natural Resources and Environment plans to issue a specific decree on land encroachment in the coming weeks.

The new environmental tax law covers products such as petroleum, coal, nylon bags, hydrochloro-fluorocarbons (HCFC), chemicals used to preserve wood and disinfectants and chemicals used to exterminate termites and kill grass and weeds.

The General Department of Taxation said these chemicals were potentially highly harmful to the environment.

Under the law, a tax of VND1,000 per litre will be applied to gasoline and aviation fuel, while VND300 per litre will be levied on other petroleum products.

A tax of VND20,000 will be imposed on a tonne of coal, VND4,000 per kilo of HCFC, VND40,000 per kilo of plastic bags, VND500 per kilo of grass/weed killer and VND1,000 per kilo on other chemicals.

However, the department said the tax would be collected from households, organisations and individuals that produce the items not on users.

Banks told to report foreign loans

The State Bank of Viet Nam sent an official dispatch to foreign banks and credit institutions on Tuesday requesting them to report outstanding loans given out to foreign direct investment (FDI) enterprises before November 30.

The creditors must report outstanding loans provided to FDI enterprises doing business in Viet Nam and those for customers investing abroad whose credit agreements were valid until October 31, 2011.

The move falls under Government Circular 1617/CT-TTg issued on September 19, 2011 on promoting and strengthening the management of foreign direct investment in Viet Nam in the time to come.

VN-Germany forum opens

A Vietnamese-German investment and business forum opened in Berlin on Tuesday.

Vietnamese Ambassador to Germany Do Hoa Binh said the forum would provide a valuable opportunity for businesses to explore expanding their overseas investments, especially in the fields of infrastructure, energy and technology.

The diplomat expressed his hope that German enterprises would invest more in Viet Nam so that Vietnamese goods would become familiar to German consumers.

Berlin's Minister for Economics, Technology and Women's Issues, Harald Wolf, affirmed that significant potential remains for investment co-operation between Viet Nam and Germany. He said he expected a surge in collaboration after the opening of a Berlin-Ha Noi direct air route in 2012, when the Berlin-Brandenburg international airport becomes operational.

VN-China firms sign $200m deals

Vietnamese and Chinese businesses signed economic contracts worth US$201 million at the Viet Nam-China International Trade Fair 2011, which closed yesterday in the northern border province of Lao Cai.

The six-day event drew the participation of nearly 300 businesses from 20 cities and provinces within the two countries. On display at over 700 pavilions were handicrafts, electrical appliances, chemicals, clothing, farm produce, foodstuff, electronics, equipment, motorbikes and pharmaceutical products.

The event helped businesses gain nearly VND75 billion ($3.57 million) in revenue, mainly from aquatic products, wooden furniture and household utensils. A seminar was also held on development co-operation between Lao Cai and China's Yunnan Province.

Milk-carton recycling plant opens

The Dong Tien Packing & Paper Company yesterday opened the country's first-ever line to completely recycle used milk cartons.

The line, set up with support from Tetra Pak Vietnam, the food processing and packaging solutions provider, can completely recycle the cartons – which are made of paper, plastic, and aluminium, said Hoang Trung Son, chairman of Dong Tien.

Cartons used to package cow milk, soya milk, and juices consist of six different layers, of which 75 per cent is paper and the rest plastic and aluminium, he said. The line can process 50 tonnes of packs a day, yielding 25-30 tonnes of paper fibre and 500 plastic and aluminium roofing sheets from a pulping process.

Eight collection centres have been set up in Ha Noi, HCM City, Nha Trang, and Bien Hoa and Binh Duong and Tay Ninh Provinces to collect used cartons.

Cargo ship delivered to British group

The Ha Long Shipbuilding Co Ltd unveiled a 53,000-tonne cargo vessel for the UK Graig Group yesterday.

The vessel, signed HL 15 and named Thor Brave, has five cargo-cellars, is 190m long and 32m wide, and is capable of moving at 14 nautical miles per hour. HL 15 is the last vessel to be launched under a contract to build nine vessels for the UK group signed in 2004.

Koreans to build apartment complex

Hung Viet & KRDF 03 Company, a Viet Nam-South Korean joint venture, officially selected yesterday POSCO E&C Vietnam as its contractor for the US$40 million Eastern Project.

The Korean partner holds an 80 per cent stake in the joint venture.

Located in HCM City's District 9, The Eastern Project is a 22-storey apartment complex with almost 650 units that will be handed over to customers by the end of 2013, according to the company's deputy general director, Park Jong Woo.

Businesses struggle to fulfil targets

Listed firms had hoped to boost profits toward the end of the year, but securities analysts have recently cast a shadow over the bright final quarter of business results.

"Many enterprises may in fact report heavy losses in the last quarter of the year, as people default on their credit debt due to the difficult economic climate," said Woori Securities Co's head of trading Dang Ngoc Hoa.

In particular, stagnation in the real estate sector could have a severe impact on the economy, since the number of listed developers and property-related companies accounted for more than 30 per cent of the stock market, Hoa said.

Chief economist of Thang Long Securities Co, Pham The Anh, suggested that the situation may not be as bleak as projected.

"In fact, these companies may escape significant losses because the prices of their projects were inflated so far beyond actual costs," he said.

However, for securities investors, shares of real estate companies have lost their appeal because they contain too much risk, he added.

Many construction companies, such as Song Da Urban Investment (SDU) and Song Da Co No 96 (S96), have responded to the dire predictions by setting low targets for the fourth quarter, as their Q3 results dropped from the same period last year. SDU blamed its declining profits on high inflation, slow loan reclamation procedures, and tightened credit for non-manufacturing sectors.

The company expects only VND5.3 billion (US$248,800) in gross profit for the last quarter.

After having high hopes for profit of VND43.3 billion ($2 million), S96 saw a great plunge in the third quarter; the company was unable to sell any real estate projects and made provisions for securities devaluation.

Engineering Construction Co No 492 (C92) aimed to achieve VND3 billion ($140,800) in gross profit, improving on the previous quarter by VND200 million, although target revenue accounts for only 22 per cent or VND42.4 billion (nearly $2 million) of the Q3 figure. C92 also asked its partners to speed repayment so that the company could begin to spend on its projects.

Meanwhile, Sai Gon Garment Co (GMC) last month made a strategic deal with casual wear retail chain Blue Exchange in order to boost its retail market share.

According to company chairman Le Quang Hung, the agreement was a more professional way to conduct business while inventories remained over-stocked due to unstable consumption and a weak market.


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